Inflation Expected To Rise Towards 4% Amid Fuel Price Pressures

South Africa’s inflation rate is expected to trend upwards in the coming months, with economists warning that rising fuel costs and global price pressures will begin to filter through into consumer prices.

Data from Statistics South Africa shows that annual consumer inflation edged up to 3.1% in March from 3.0% in February. Key contributors included housing and utilities, food and non-alcoholic beverages, as well as insurance and financial services.

Economists say the latest figures do not yet reflect the full impact of global developments, particularly oil price shocks linked to geopolitical tensions in the Middle East. These effects are expected to become more visible in upcoming inflation data.

Annabel Bishop noted that inflation is likely to climb to around 4% year-on-year in the second quarter of 2026 as delayed cost pressures feed through. For the year overall, inflation is projected to average close to 3.8%, with risks tilted to the upside.

Meanwhile, Lesetja Kganyago has set a revised inflation target of 3%, with a tolerance band of one percentage point on either side. The move aims to anchor inflation expectations and align policy with international standards.

Rising global prices for oil, gas, fertilisers and other commodities are expected to add further pressure, alongside currency weakness and higher food costs.

Economists also anticipate that the impact of fuel price increases will become clearer in April’s data, potentially pushing inflation closer to the upper end of forecasts.

Johann Els expects inflation to rise to between 3.7% and 3.8% in April as fuel costs take effect, while Elna Moolman said future trends will depend on oil prices, exchange rate movements and the duration of global tensions.

On interest rates, analysts suggest a possible 25 basis point increase later in the year, though this will depend on whether inflation pressures persist.

The outlook remains uncertain, with fuel price movements and global developments likely to play a decisive role in shaping inflation in the months ahead.