The PayInc Economic Index, which measures the value of all electronic transactions processed through PayInc, saw a 0.9% increase in March 2026. This moved the index point to reach an index level of 104.7 in March, 4.6% higher than a year ago.

The gains for the first quarter of the year are attributed to moderating inflation, real wage increases, interest rate cuts and improved confidence levels.

However, Independent Economist Elize Kruger cautions that although March’s strong economic performance is encouraging, it is the calm before the storm.

Following an all-time high of 197 million transactions cleared through PayInc, in December, the number of transactions subsided in January and February, but spiked in March 2026 to 195.5 million, up by 13.4%, a year ago.

The payments operator says notable volume increases were recorded in the PayShap and EFT credit payment streams.

Kruger says the strong numbers were supported by positive economic tailwinds from 2025, however, economic prospects for 2026 have changed.

“These strong numbers suggest that the tailwinds that have been supporting the economy since 2025 have indeed made a positive impact on March’s numbers, including real salary increases, moderate inflation, lower interest rates, and better confidence levels in the economy. Unfortunately, it feels like the calm before the storm, as the Middle East war has abruptly changed economic prospects for South Africa for 2026,” says Kruger.

WATCH | Makwe Masilela from Makwe Fund Managers discusses the economic impact of US–Israel–Iran tensions, including oil prices, currency pressure and inflation risks for South Africa. pic.twitter.com/ZEgL140gM8

— SABC News (@SABCNews) March 24, 2026

Looking ahead, Kruger says the effects from the Middle East conflict are already being felt by South Africans through fuel prices. She warns that more economic headwinds are yet to come in the coming months.

“We might look out for a more broad-based impact on inflation, not only on fuel prices per se, but more broadly. We have already started to see transport operators, from airlines to courier companies to e-hailing taxi services, all raising their fares in April in reaction to higher fuel prices. It is virtually impossible for companies to absorb the extent of the price increases that we have seen. Therefore, we could expect inflation numbers to creep up and settle at levels that are most likely going to be uncomfortable for the Reserve Bank,” adds Kruger.

This week, the International Monetary Fund revised growth forecasts to 1% from 1.4% previously.

Kruger says a negative scenario is likely to play out in the remainder of this year on the back of what is happening in the Middle East.

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