Global inflation flagged

Finance Minister Enoch Godongwana on Wednesday warned that the Russia/ukraine conflict carries with it significant risks for the world economy that is yet to fully recover from the shock of the Covid-19 pandemic.

Godongwana, who was responding to the budget debate in parliament, said if the conflict, as well as further sanctions lasted, it could lead to widespread global inflation and impede the global economic recovery.

“On the positive side, we expect that the rally in export commodity prices will provide added support to the local mining sector and a possible windfall to revenue collections.”

However, he said the rising oil price, the potential weakening of the rand against the US dollar and supply constraints around wheat posed upside risks to food and headline inflation.