South Africa Inflation Rate Surprisingly Cools to 3.5%

South Africa’s annual inflation rate inched up to 3.6% in December 2025 from 3.5% in the prior month, in line with analysts' expectations. The headline inflation rate remains within the 1 percentage point tolerance band of the SARB's new 3% target. The main contributors to the increase were housing & utilities (4.9%), food & non-alcoholic beverages (4.4%) and insurance and financial services (7%). The core inflation rate, which excludes food, non-alcoholic beverages, fuel, and energy, rose to 3.3% in December, the highest in ten months, from 3.2% in November. On a monthly basis, the CPI rose by 0.2%, after decreasing by 0.1% in the previous month. The average inflation rate for 2025 was 3.2%, marking the lowest level in 21 years and below the central bank’s 3.3% forecast.

South Africa’s annual inflation rate edged down to 3.5% in November 2025 from 3.6% in October, slightly below market forecasts of 3.6%. Price growth cooled in five of the 13 product categories, most notably transport (0.7% vs 1.5% in October), of which fuels (0.1% vs 3.3%); and recreation, sport & culture (2.9% vs 3.4%). On the other hand, food & non-alcoholic beverages (4.4% vs 3.9%), particularly meat prices (12.2% vs 11.4%), amid ongoing outbreaks of foot-and-mouth disease; restaurants & accommodation services (2.3% vs 2.1%), and alcoholic beverages & tobacco (4.6% vs 4.5%) recorded higher rates. The core inflation rate, which excludes food, non-alcoholic beverages, fuel, and energy, inched up to 3.2% in November from 3.1% in October. On a monthly basis, the CPI fell by 0.1%, following a 0.1% increase in the prior month.

South Africa’s annual inflation rate rose for the second month to 3.6% in October 2025 from 3.4% in September, though below analysts' estimates of 3.7%. It was the highest reading since September 2024, mainly on account of prices of housing & utilities (4.5% vs 4.5% in September), notably electricity (8.2%) and water supply & other services (7%); alcoholic beverages & tobacco (4.5% vs 4.2%) and recreation & culture (3.4% vs 2.9%). Moreover, transportation prices rose 1.5%, marking the first increase in over a year, driven by a sharp rebound in fuels (3.3% vs -2.2%). Meanwhile, some categories recorded smaller price-growth, primarily restaurants & accommodation services (2.1% vs 3%) and food & non-alcoholic beverages (3.9% vs 4.5%). The core inflation rate, which excludes food, non-alcoholic beverages, fuel, and energy, eased to 3.1% in October 2025 from a seven-month high of 3.2% in September. On a monthly basis, the CPI edged up by 0.1%, following a 0.2% increase in the prior month.