South Africa's consumer price index averaged 3.2% in 2025, down from 4.4% the previous year, staying within the Reserve Bank's target range. Inflation rose slightly to 3.6% in December, but economists remain optimistic due to factors like fuel price reductions and a stronger rand. The overall trend signals progress in managing price pressures.
South Africa's consumer price index (CPI) recorded an average of 3.2% for 2025, a notable decline from the 4.4% average in 2024. This figure places inflation comfortably within the South African Reserve Bank's (Sarb) target range of 2% to 4%, with 3% as the midpoint. Statistics South Africa announced on January 21, 2026, that the year-on-year rate for December 2025 stood at 3.6%, up from 3.5% in November.
Throughout 2025, CPI fluctuated between a low of 2.7% in March and highs of 3.6% in October and December. Investec chief economist Annabel Bishop noted that CPI is expected to return to the 3% target this quarter. She highlighted the impact of a January fuel price cut of 66 cents per litre, which could reduce inflation by 0.2% month-on-month, and a larger 77 cents per litre cut anticipated in February. Bishop also pointed to a stronger rand, which has appreciated by about 2.5% in 2026 so far, alongside declining global food prices. She forecasts inflation nearing 3% year-on-year in February, potentially dipping below that level in the second quarter of 2026 and remaining low through the fourth quarter, supported by stable food and energy prices and the rand's strength.
Nedbank economist Nicky Weimar anticipates a moderate rise in inflation during the first quarter of 2026, peaking around 3.7%, before easing back toward 3%. This uptick stems from base effects from the previous year, plus pressures from food and fuel. Weimar emphasized meat prices, driven by the ongoing foot-and-mouth disease outbreak. Vaccine rollout has been hampered by shortages, and herd rebuilding will take time, leading to double-digit meat price inflation until about April 2026.
Domestically, South African maize futures have hit near four-year lows, offering some relief, though recent heavy rains pose risks to crop yields.
