Johannesburg — The average inflation forecast for 2025 in a closely watched survey commissioned by the central bank fell further in the first quarter of this year, dropping below the level the bank aims for.
The Bureau for Economic Research (BER) said its survey found analysts, business people and trade union officials now expect inflation of 4.3% in 2025, down from 4.5% in the previous survey.
The South African Reserve Bank tries to keep inflation near 4.5%, the midpoint of its 3%-6% target band.
Headline consumer inflation edged up to 3.2% year on year in January the latest month for which data is available.
February inflation data is due out on Wednesday and is expected to come in close to 3.2%, but economists polled by Reuters predict the central bank will pause its rate-cutting cycle on Thursday.
The South African Reserve Bank is known for its cautious approach to monetary policy, and its governor has in recent weeks stressed risks from global trade tensions and a potential value-added tax (VAT) hike locally.
For 2026 the average inflation forecast of analysts, businesspeople and labour unions in the BER survey was unchanged at 4.6%.
Analysts remain the most optimistic of the three surveyed groups, forecasting inflation of 3.9% this year and 4.3% next.
The average economic growth forecast of respondents was 1.2% for 2025, well below the 1.9% growth the government predicted in last week’s budget.
The budget remains deadlocked in the biggest test yet of South Africa’s coalition government, as most political parties have rejected it over a contentious plan to raise VAT.
*Kopano Gumbi; editing: Alexander Winning – Reuters
