CPI for August 2025

In August, South African inflation moderated unexpectedly, with consumer prices increasing by 3.3% year-on-year compared to 3.5% in the previous month.

The most recent Reuters Poll of economists anticipated a higher rate of 3.6%. On a month-to-month basis, inflation registered at -0.1% in August, following a 0.9% rise in July. Annual core inflation, which excludes volatile categories such as food and energy, was reported at 3.1% for August, consistent with analysts' expectations.

In August 2025, goods inflation was 3.1% (down from 3.2% in July), while services inflation remained at 3.6%. Housing, utilities, food, and non-alcoholic beverages were the main drivers of the 3.3% overall inflation rate. Average inflation expectations for two years ahead – the Monetary Policy Committee’s (MPC) preferred gauge for decision-making on interest rates - dropped to 4.2% in Q3, the lowest since 2005.

With inflation under control, the South African Reserve Bank (SARB) has cut its main lending rate at three out of four meetings this year. As global inflation falls, central banks worldwide are reducing rates. In its latest update, the SARB announced it would start aiming to target 3% inflation, although this change has not yet been officially approved by the finance minister.

South Africa's Bureau for Economic Research in its third-quarter inflation expectations survey reported lower short-term inflation expectations, with 2025 and 2026 forecasts now at 3.8% and 4.2%, down from earlier estimates. The survey notes that the SARB’s efforts have helped reduce expectations, drawing increased investment in bonds and currency.