South Africa’s inflation outlook has become more challenging for the South African Reserve Bank (SARB), with new data showing expectations moving higher in the second quarter.
Two-year inflation expectations rose to 3.9% from 3.6% in the previous survey period, reflecting growing concern about future price pressures.
The increase coincided with a rise in actual inflation, which climbed to 4.5% between survey periods. This was partly driven by record-high fuel prices during that time.
The SARB has previously warned that rising inflation expectations can become self-fulfilling, potentially feeding into broader price increases across the economy. Policymakers have indicated they may need to act to ensure inflation remains anchored close to the bank’s 3% target.
Although global oil prices have since eased following a ceasefire between the United States and Iran offering some relief to fuel costs the central bank remains cautious about the overall inflation trajectory.
The Reserve Bank is expected to announce its next interest rate decision on 23 July, a move that will be closely watched by markets and consumers amid ongoing cost-of-living pressures.