SA's slight inflation uptick no too effective, says economist

Some economists believe South Africa’s slight inflation uptick does little to change the broader picture, with price pressures still contained despite rising household costs.

Statistics South Africa (Stats SA) put consumer price inflation at 3.6% for December, up marginally from November, closing out 2025 with the lowest average inflation rate in more than two decades.

But analysts warn that while the headline number looks calm, the pain points for households are becoming clearer.

Economists said housing and utilities were the biggest drivers of the December inflation, accounting for about a third of the overall figure.

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Sharp water and electricity price increases did much of the damage, at a time when many households are already stretched by food and transport costs.

The lead economist at KPMG South Africa, Frank Blackmore, said while inflation may edge slightly higher in 2026, it’s more about technical base effects than a real surge in prices.

“We expect inflation to come in around 3.7% in 2026. This will help and not deter the Reserve Bank reducing interest rates further.”

He predicts a further 50 basis points of rate cuts throughout the year, offering some relief for borrowers, even as daily living costs remain uneven.