South African inflation expectations fall after setting of 3% target

JOHANNESBURG, Dec 12 (Reuters) – Expectations for inflation in South Africa in 2026 have dropped sharply since the finance minister announced a lower 3% inflation target, a fourth quarter survey of business people, trade union officials and analysts showed on Friday.
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The average forecast was for inflation of 3.8% next year and 3.7% in 2027, down from 4.2% in both years previously.
The survey was conducted between November 17 and December 4.
Finance Minister Enoch Godongwana announced the lower inflation target on November 12 after months of lobbying by the central bank, which argued the previous target range of 3%-6% was making the economy uncompetitive.
Analysts gave the lowest inflation forecasts in the survey, of 3.5% in 2026 and 3.4% in 2027.
Business people expect inflation of 3.9% in 2026 and 4.0% in 2027, while trade union officials expect inflation of 3.9% in 2026 and 3.8% in 2027.
The South African Reserve Bank’s next interest rate announcement is scheduled for January 29.
Reporting by Kopano Gumbi; Editing by Alexander Winning, Alexandra Hudson