The global economy has shown greater resilience than expected despite renewed tension in the Middle East, persistent inflation risks and uneven regional growth, says Maarten Ackerman, Chief Economist at CAM Asset Management.
He explains that “markets initially feared that the conflict between the United States (US) and Iran could trigger a severe global slowdown. While the worst-case scenarios have not materialised, the economic effects are likely to persist.”
“We are dealing with a protracted disruption rather than a short-lived shock. Infrastructure damage, supply chain constraints and logistical bottlenecks will take time to resolve. Even if oil prices ease, the effects will continue to filter through inflation, trade and economic growth,” cautions Ackerman.
INFLATION REMAINS THE KEY RISK
He highlights that “Inflation remains one of the most significant risks to the outlook. Freight costs remain elevated, supply networks have not fully normalised and rebuilding energy infrastructure in the Middle East will continue to add costs.”
“Fertiliser shortages, disruptions to food production and concerns that El Niño could extend into 2027 may place further pressure on global food prices,” he notes.
“The debate is no longer about how quickly interest rates will fall,” says Ackerman. “Central banks are now considering whether inflation will remain high enough to delay cuts further, or whether additional increases could still be required.”
A K-SHAPED GLOBAL RECOVERY
CAM Asset Management initially expected a J-shaped global recovery, with growth falling before gradually returning to capacity. He says, “The outlook has improved modestly, but the recovery remains uneven.”
“The global economy has stabilised, but developed markets are not moving in the same direction, the US continues to benefit from strong investment in technology, artificial intelligence and digital infrastructure, while Europe, the United Kingdom and Japan remain under pressure,” he explains.
“The US economy is expected to grow by about 2.2% a year, supported by productivity gains and sustained capital investment. Europe and the United Kingdom are expected to average about 1% growth over the next three years, while China is forecast to grow by around 4.25% as it navigates weak consumer demand and a prolonged property downturn,” he says.
SOUTH AFRICA’S STRUCTURAL CONSTRAINTS REMAIN
According to Ackerman, “South Africa (SA) remains vulnerable to external shocks because of weak investment, infrastructure constraints and subdued domestic demand.”
“Agriculture contributed strongly to growth in 2025, expanding by about 17% after contracting by 8% in 2024. However, rising fuel and fertiliser costs, weather risks and foot-and-mouth disease make a repeat performance unlikely,” he cautions.
Ackerman points out that “consumer spending has weakened sharply. Household consumption, which accounts for about 60% of the economy, slowed from around 1% growth over several quarters to 0.1% in the latest quarter.”
“Commodity exports have offset weakness elsewhere, but recent gains have been driven largely by higher prices rather than increased production. Mining volumes remain below capacity, while rail and port constraints continue to limit export growth,” he says.
“SA’s core challenge is investment,” says Ackerman. “Gross fixed capital formation is about 14% of gross domestic product (GDP), well below the level required to support stronger and more sustainable growth.”
GREEN SHOOTS ARE EMERGING
He notes that “despite these challenges, structural reforms are beginning to improve parts of the economy.”
“Progress in the energy sector has helped ease electricity constraints, while reform has encouraged greater private-sector participation in electricity generation and infrastructure. Rail volumes are recovering and some longstanding logistic bottlenecks are gradually being addressed,” he highlights.
SA’s ports are also showing progress. He points out that “Durban Harbour has reportedly climbed almost 500 places in international port rankings following the appointment of a new international operator. Coega and Gqeberha have also recorded operational improvements.”
“These developments demonstrate what can be achieved when structural reform is implemented effectively,” says Ackerman. “Better energy, rail and port performance can strengthen business confidence, improve competitiveness and help SA take greater advantage of export demand.”
THE OUTLOOK FROM HERE
CAM Asset Management expects SA growth to remain below 1% in 2026 before moving closer to 2% over the next three years if reform momentum and private-sector participation continue.
“The next 12 months will remain challenging, but the direction of travel matters,” says Ackerman. “If SA continues to improve energy, logistics and infrastructure while creating a more investment-friendly environment, growth can strengthen gradually over the medium term.”
For investors, he says “the priority should remain disciplined portfolio construction rather than reacting aggressively to short-term developments.”
“We are using prudent growth assumptions, testing portfolios against a range of scenarios and maintaining effective diversification. In an uncertain world, resilience matters more than attempting to predict a single outcome,” Ackerman concludes.
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