BY MBONGENI NDLELA
MBABANE – The Central Bank of Eswatini (CBE) has warned that rising geopolitical tensions and increasing global uncertainty pose significant risks to economic growth, inflation stability and international financial markets.
In the 2026 Governor’s Annual Monetary Policy Statement, the Bank highlighted the ongoing conflict in the Middle East as one of the biggest threats to the global economy.
According to the report, the conflict has already disrupted global supply chains, pushed oil prices sharply higher and increased uncertainty across financial markets.
“Risks are decisively on the downside. A prolonged conflict, deeper geopolitical fragmentation, disappointment over AI-driven productivity, or renewed trade tensions could weaken growth and unsettle markets,” the report stated.
The Central Bank revealed that Brent crude oil prices surged dramatically during the first quarter of 2026, averaging over US$109 per barrel in March 2026.
The report noted that strong demand from Asia-Pacific markets and heightened geopolitical tensions contributed to the sharp increase in oil prices.
“Crude oil prices extended their gains in March 2026 to average US$109.03 a barrel supported by firm physical market fundamentals,” the report stated.
At the same time, gold prices reached historic highs as investors rushed toward safe-haven assets.
“The precious metal was described by the World Gold Council as the premier safe-haven asset in 2025,” the report noted.
Gold prices reportedly climbed to over US$5,200 per ounce in February 2026 before easing slightly in March.
The report also warned that global inflation is expected to rise in 2026 before slowing in 2027.
“Global inflation has been revised upwards and is expected to increase to 4.4 per cent in 2026 before declining to 3.7 per cent in 2027,” said Governor Dr. Phil Mnisi.
The Governor explained that the increase is largely linked to higher energy prices caused by supply disruptions associated with geopolitical conflicts.
Meanwhile, the International Monetary Fund revised global economic growth forecasts downward from 3.3 per cent to 3.1 per cent for 2026.
The report further noted that uncertainty surrounding global trade policies, including United States tariff measures, continues to place pressure on international markets.
Despite these global risks, the Central Bank maintained that Eswatini’s financial system remains stable and resilient.
The Bank stressed the importance of maintaining prudent monetary and fiscal policies while strengthening economic adaptability.
“Policies should foster adaptability, enhance credibility, and reinforce international cooperation,” Dr. Mnisi said.
The report also called for stronger international collaboration to address global economic instability and support sustainable growth.
The findings highlight the growing interconnectedness between global events and domestic economic conditions, reinforcing the need for continued vigilance as countries navigate an increasingly uncertain international environment.
