South Africans are showing growing confidence in the Reserve Bank’s ability to manage inflation. South Africans are showing growing confidence in the Reserve Bank’s ability to manage inflation, as long-term expectations fall to their lowest level since records began in 2000. According to the Bureau for Economic Research (BER), the average forecast for two- and five-year inflation expectations dropped to 3.7%, down from 4.2%.
Next-year expectations also fell to 3.8%, while household one-year expectations eased to 5.3%. “The big local story is inflation credibility,” said Wichard Cilliers, head of Market Risk at TreasuryONE. Cilliers added that this was a significant vote of confidence in the SARB’s new 3% inflation target and “strengthens the case for further rate cuts later in the cycle”.
The survey captures the views of analysts, businesses, trade unions, and households and is conducted quarterly on behalf of the South African Reserve Bank (SARB). Bianca Botes, director at Citadel Global, previously said that “inflation is projected to linger around the 3.4% mark for the remainder of 2025”. The BER forecastsannual consumer inflationto increase to 3.9% in November, from 3.6% in October, mainly due to rising transport costs.
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Fuel prices, which had been suppressing headline inflation for thirteen months, turned positive contributors in October. Core inflation is projected to accelerate to levels last seen in January and February 2025, before easing from March, said BER.
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