THE country’s economic growth faces rising external pressures as global oil prices climb and the Lilangeni weakens against major currencies.
The economy recorded strong growth in the first quarter of 2026, but rising global commodity prices, currency depreciation and a widening trade deficit presented a challenging backdrop for businesses, according to the ministry of economic planning and development’s quarterly economic bulletin for 2026Q2.
The report indicated that real gross domestic product (GDP) grew by 6.1% year-on-year in 2026Q1, driven mainly by manufacturing, mining and quarrying as well as information and communications technology.
The secondary sector expanded by 13.9%, highlighting the contribution of productive industries to economic performance.
However, external conditions remained uncertain.
The ministry’s bulletin noted that “Global growth forecasts for 2026 were revised downward to 3.0% (from 3.3%)”, with the outlook shaped by the Middle East conflict and advances in artificial intelligence. South Africa, Eswatini’s main trading partner, was projected to grow by 1.1% in 2026.
Global commodity prices also increased during the quarter. According to the report, “Brent crude oil averaged USD 95.3 per barrel (up 25.8% from Q1).” Global coal and food prices also rose, adding to the challenging international economic environment.
Currency movements further complicated the outlook. The ministry reported that “the Lilangeni weakened against the major trading currencies over the quarter,” with the US Dollar averaging E16.48, the British Pound E22.12 and the Euro E19.16. A weaker currency could increase the domestic cost of imported goods and production inputs, particularly where businesses depended on foreign suppliers.
Domestically, headline inflation rose to 2.4% in the second quarter, from 1.9% in the first quarter. The report stated that the increase was driven by “price escalations in the housing and utilities category, as well as transport,” although food inflation moderated.
The discount rate remained at 6.75%, while the prime lending rate stood at 10.25%.
Trade figures also pointed to pressure on the external position.
The bulletin stated that “exports grew by a lower 6.1% when compared to imports, which grew by 8.7%.” Merchandise exports totalled E10.657 billion, while imports reached E11.476 billion, resulting in a trade deficit of E818.5 million.
Sugar and textile exports performed strongly during the period.
Meanwhile, private-sector credit increased by 2.7% to E23.765 billion, while gross official reserves stood at E8.1 billion, covering 1.9 months of imports.
Overall, the bulletin presented a mixed picture of economic resilience and external vulnerability. Strong GDP growth and improved activity in key sectors contrasted with higher global oil prices, a weaker Lilangeni and a widening trade deficit, highlighting the economic pressures surrounding local growth outlook.
| Reading | Figure | Period in the copy | Handle with care |
|---|---|---|---|
| Real GDP | +6.1% year-on-year | 2026Q1 | Not the export growth rate, which is also printed as 6.1%. |
| Secondary sector | +13.9% | Placed next to the Q1 GDP paragraph. Quarter not restated. | Do not write “in 2026Q2” on this line. |
| Named drivers | Manufacturing, mining and quarrying, ICT | 2026Q1 GDP paragraph | No sector shares are given. |
| Headline inflation | 2.4%, from 1.9% | Second quarter, from the first | Up 0.5 percentage points. Housing and utilities, and transport. Food inflation moderated. No food rate is printed. |
| Brent crude | USD 95.3 a barrel, up 25.8% from Q1 | The quarter covered by the bulletin | The Q1 price is not printed. Do not invent one, and do not convert the barrel into emalangeni. |
| Lilangeni averages | E16.48 per US dollar; E22.12 per pound; E19.16 per euro | Quarter averages. Direction: weaker. | No end-of-quarter rate, and no percentage depreciation, is given. |
| Policy rates | Discount 6.75%. Prime 10.25%. | Unchanged. “Remained” and “stood”. | The Central Bank is not named. The 3.50 point gap is a desk reading, not a printed spread. |
| Merchandise trade | Exports E10.657 billion, up 6.1%. Imports E11.476 billion, up 8.7%. Deficit E818.5 million. | The bulletin’s trade period. Growth base not stated. | Components imply E819.0 million. The E0.5 million gap is rounding. Do not adjust. |
| Private-sector credit | +2.7% to E23.765 billion | As reported in the bulletin | Any emalangeni increase derived from the 2.7% is a desk estimate, because the rate may be rounded. |
| Reserves | E8.1 billion, 1.9 months of imports | As reported | Not the same as reserves divided by this quarter’s merchandise imports, which is about 2.1 months. Keep 1.9. |
| External forecasts | World 3.0%, cut from 3.3%. South Africa 1.1%. | Full-year 2026 projections | Forecaster not named. Not comparable with the Q1 GDP outturn. Middle East conflict and AI are the factors the bulletin names. |
Source: Ministry of economic planning and development quarterly economic bulletin for 2026Q2, as reported by Musa Simelane. Sugar, textiles, coal and food prices are mentioned without figures.
