South Africa 1-Year Inflation Outlook Jumps in Q2

South Africa's one-year-ahead inflation expectations among households eased to 4% in Q3 2026 from 4.2% in the previous period, when the oil shock caused by the Middle East conflict pushed expectations higher. Average inflation expectations two years ahead, a measure the central bank closely tracks in setting interest rates, also edged down to 3.8% from 3.9% previously. The South African Reserve Bank seeks to anchor inflation expectations around its 3% inflation goal. Since the last survey, inflation rose to a peak of 5% in June before moderating to 4.3% in July.

South Africa's one-year-ahead inflation expectations among households surged to 4.2% in Q2 2026 from an all-time low of 3.6% in the previous period. Average inflation expectations two years ahead, a measure the central bank closely tracks in setting interest rates, also inched up to 3.9% from 3.6% previously. The survey, conducted between May 18 and June 4, preceded the signing of the agreement to reopen the Strait of Hormuz, which has since eased global oil prices and reduced domestic fuel costs. Between the two survey periods, South Africa's annual inflation climbed to 4.5% from 3%, driven by a spike in gasoline prices to record levels. Among respondents, analysts see the fastest return to the central bank’s 3% target, with inflation easing to 3.5% by 2028. Businesses and unions are more cautious, expecting it at 4% and 4.4%, respectively.