Godongwana adopts 'wait and see' approach to Middle East conflict risks

Finance Minister Enoch Godongwana says the government is adopting a “wait and see” approach to the escalating conflict in the Middle East and its subsequent impact on the global economy.

Responding to written parliamentary questions, Godongwana noted that the government is actively gathering information to better understand the full extent of the impact on critical sectors, specifically fuel supply and pricing.

The minister was questioned by both the Freedom Front Plus (FF Plus) and the MK Party regarding rising fuel costs linked to the conflict and the potential blockade of the Strait of Hormuz by the Islamic Republic of Iran.

The political parties expressed concern that the volatility makes it extremely difficult for countries to plan with certainty, citing the inevitable knock-on effects of energy instability on the domestic market.

Despite these pressures, Godongwana maintained that a cautious approach is currently the most prudent path for the National Treasury.

He stated that at this stage, the government is adopting a "wait and see" approach while actively gathering information to understand the full extent of the impacts of these developments on the domestic economy.

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The Minister emphasised that a worsening economic outlook, particularly one heightened by global risk sentiment, demands even more disciplined fiscal management.

To address potential shocks, Godongwana reminded Parliament that the 2026 Budget fiscal framework already includes a contingency reserve.

He explained that this reserve is specifically designed to provide a cushion for any unforeseen and unavoidable emergencies that may arise between now and the next budget cycle.