Inflation expectations in South Africa have fallen significantly, according to a recent quarterly survey published by the Bureau for Economic Research (BER).
The report highlights that analysts, business leaders, and trade unions now forecast an average consumer inflation rate of 3.9% for 2025, down from 4.4% in the previous quarter.
This marks the first time in over four years that the annual inflation projection has dipped below 4%.
Expectations for 2026 and 2027 have also eased, declining to 4.3% and 4.5% respectively. This broad-based decline across all surveyed groups could provide further support for the South African Reserve Bank (SARB) to maintain its dovish stance on interest rates.
The SARB, which aims for inflation between 3% and 6%, recently lowered its key lending rate to 7.25% and reiterated its preference for achieving a 3% inflation target.
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Consumer inflation in South Africa stood at 2.8% year-on-year in May, marking the third consecutive month below the 3% threshold. The next interest rate decision by the central bank is scheduled for July 31.
However, while inflation forecasts are trending downward, economic growth expectations have deteriorated.
The survey reveals that average growth projections for 2025 have dropped to 0.9%, compared to 1.2% in the previous quarter. This downward revision comes after South Africa’s economy expanded by just 0.1% in the first quarter, weighed down by underperformance in the mining and manufacturing sectors.
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