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# South Africa's policy uncertainty index fell from 81.9 to 61.3, and it is still above the worry line
- URL: https://www.businessbagel.com/policy-uncertainty-index-eases-third-quarter/
- Published: 2026-10-02T03:00:00.000Z
- Updated: 2026-10-02T02:59:59.000Z
- Description: North-West University's policy uncertainty index eased sharply in the third quarter, but the reading still signals heightened uncertainty, with a budget and municipal elections ahead.
- Author: Christian Maidman
- Tags: Economy, Business Bagel News

Businesses may be starting to treat the oil shock as the new normal. That is the North-West University Business School's reading of its policy uncertainty index, which eased to 61.3 in the third quarter from 81.9 in the second.

The index draws its line at 50\. A reading above it counts as heightened policy uncertainty and one below it as reduced, so the third quarter was a good deal less worried than the second without getting anywhere near calm.

The uncertainty is still coming from the global energy shock set off by the US-Iran war. The report says worries about whether refined fuel would be available dominated supply chain concerns, and that with the Middle East this unstable, even small events move oil prices and price expectations out of all proportion.

## A shrinking quarter and rising rates

The shock has shown up in the economy. GDP shrank 0.2% in the second quarter, which the report calls a serious setback, and investment in buildings and equipment, which the February budget expected to recover this year, has fallen again in recent months.

Interest rates are moving the wrong way as well. On 23 September the Reserve Bank raised its rate by another quarter of a percentage point, worried about inflation in services and higher fuel costs, and the US Federal Reserve, the European Central Bank and the Bank of Japan have all recently raised theirs. The Reserve Bank also trimmed its growth forecast for this year again, to 1.2% from 1.4%.

The school is less gloomy about the direction than about the pace. South Africa's momentum earlier this year was "interrupted by global developments, but not definitively derailed", it says, and structural reforms are pointing the right way. Without much higher investment, though, it warns that the economy will struggle to grow faster than the 1% to 2% a year it has been stuck in.

## October and November

The next tests are already on the calendar. Finance minister Enoch Godongwana tables the medium-term budget on 21 October, and the report wants it to reset the fiscal numbers to match the economy as it is, rather than lean on over-optimistic forecasts. Municipal elections follow on 4 November, and the latest Rand Merchant Bank and Bureau for Economic Research survey already found business confidence subdued, with the election outcome seen as crucial to lifting it.

Between them, the report says, the budget and the vote could shape how business and investors feel for the rest of the year.