Good news on inflation in February, but don’t celebrate yet

Annual consumer price inflation cooled to 3.0% in February from 3.5% in January 2026, thanks to lower food prices and a delay in implementing medical aid increases. Statistics South Africa (Stats SA) data released on Wednesday showed that consumer price inflation (CPI) rose 0.4% month-on-month in February 2026. The agency said February’s print was below average, attributed to three main factors.

While analysts noted this is good news, many forecast that things could get worse in the coming months, depending on how long the Middle East conflict lasts. Professor Waldo Krugell, an economist at the Faculty of Economic and Management Sciences at North-West University (NWU), toldThe Citizenthat inflation cooling is good news; however, this will be easily disrupted by oil prices. “The inflation rate declined in February, goods inflation was down, services inflation was down, core inflation was 3%, and we know that inflation expectations were also down in quarter one,” he said.

“All this would be a win for the South African Revenue Services (Sarb) and the lower target, but unfortunately, soon to be disrupted by the war oil shock.” Tertia Jacobs, Treasury Economist and Fixed Income Specialist at Investec, said inflation in March and going forward might start rising. “Medical aid inflation remained subdued, mainly due to Discovery’s tariff increases only coming into effect in April and therefore not yet reflected in the data,” said Jacobs. “This reading is likely to represent a trough in inflation.

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From here, we expect inflation to start rising, reaching around 3.3% in March. A more pronounced increase is anticipated in April, driven by a significant petrol price shock.” “The extent of this impact will depend on whether government intervenes to reduce the fuel levy, versus a full pass-through of the under-recovery.” Stats SA said the first reason why inflation cooled is the delay in implementing some new medical aid rates.

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