SARB inflation concerns are putting attention on budgets as the South African Reserve Bank warns that price pressures may stay elevated, Cape {town} Etc reports.
The review points to Middle East conflict, energy infrastructure attacks in the Russia-Ukraine war, El Niño food pressures and a weaker rand as key risks. South Africa’s latest inflation reading was 4.4% in August, according to Stats SA, above the SARB’s 3% target.
The review says inflation rose from 3.2% in the first quarter to 4.5% in the second and could remain above 5% until the second quarter of 2027 before easing. The MPC has raised the policy rate by 50 basis points since April, taking it to 7.25%. SARB’s October review
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In September, Governor Lesetja Kganyago said, ‘We see upside risks to inflation’ in SARB’s MPC statement. The decision could affect household budgets. The next MPC decision is due on 19 November.
For households, the immediate pressure is already being felt at the petrol pump. Fuel prices rose sharply from 7 October, with 95 petrol and diesel now above R30 a litre, while the SARB says fuel inflation increased by almost 25% in the second quarter.
The Reserve Bank also warns that higher fuel costs can feed into transport, production and other prices, meaning consumers could face broader cost increases even if global oil prices later ease. The pressure is particularly relevant for commuters, small businesses and households that rely on cars, while higher transport and delivery costs can eventually affect the price of goods.
At the same time, there is some relief on the food front: the SARB says food inflation is currently at its lowest level since 2010, although El Niño and fertiliser constraints could put renewed pressure on food prices.
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Fuel prices set for sharp October increase as petrol rises by more than R3 a litre
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