JOHANNESBURG — Economists are sharply divided over where oil prices are heading, but there are signs that businesses, consumers and economies are beginning to adapt to prolonged energy-market volatility as a new normal.
Forecasts from 44 private- and public-sector economists taking part in the Bureau of Market Research and Unisa Economist of the Year Competition show a wide range of expectations for Brent crude in the fourth quarter, from about US$65 to US$95 a barrel. The median August forecast was US$77, slightly above July’s US$75.
The uncertainty matters particularly for oil-importing economies such as South Africa. Higher crude prices feed through to fuel, electricity and transport costs, adding to headline inflation. Persistent inflation can keep interest rates higher for longer, weighing on investment and economic growth, while a larger oil import bill can place pressure on the current account and the rand.
Some economists remain concerned that prolonged conflict in the Middle East, possible disruption to oil supplies through the Strait of Hormuz and domestic political uncertainty could lift fuel prices, inflation and interest rates. Others see scope for lower prices if geopolitical tensions ease, oil production rises and the rand strengthens.
Professor Carel van Aardt, project lead for the competition, said the forecasts were less pessimistic than he had expected. He said economies appeared to be adapting to the Middle East conflict, which is increasingly being treated as a persistent condition rather than a short-lived shock.
That adjustment is visible in both exporting and importing countries. Oil exporters are seeking alternative routes to market, while importing economies are diversifying suppliers. Consumers are also changing behaviour, including greater interest in hybrid vehicles and increased use of rail transport as petrol costs rise.
Van Aardt said economic shocks typically move from an initial crisis phase into adaptation and innovation, with new technologies and business models helping to mitigate risks and sometimes creating fresh opportunities for growth. He compared the process with the rapid expansion of online grocery and food delivery during the Covid-19 period.
Despite the oil uncertainty, participating economists maintained their forecasts for South African GDP growth at 1.2 percent and global GDP growth at 2.8 percent. They also expect the prime lending rate to remain at 10.5 percent in the fourth quarter.
The economists kept their forecast for household expenditure growth at 1.8 percent for 2026, but raised their annual inflation estimate slightly from 4.2 percent to 4.3 percent. Their fourth-quarter employment-growth forecast was trimmed from 0.6 percent to 0.5 percent.
The results point to an economy showing resilience but still exposed to external shocks. Van Aardt said stronger structural reform, policy certainty and investment in key growth areas would remain necessary if South Africa is to move from resilience towards stronger and more inclusive job-creating growth.
Source: Moneyweb, reporting on the 2026 BMR/Unisa Economist of the Year Competition. Read the original report.
