- September inflation below Reuters poll forecast of 4.7%
- Transport accounts for roughly a third of headline inflation
- Economists split on mid-November rate decision
South Africa’s inflation rate rose modestly in September, data showed on Wednesday, but economists expect a sharper acceleration in October after fuel prices hit a record high.
Headline consumer inflation ticked up to 4.5% year-on-year in September from 4.4% in August, moving further away from the central bank’s 3% target. The figure was below a 4.7% forecast from economists polled by Reuters.
Transport inflation accelerated to 10.8% from 8.8% in August, making it the largest contributor to the rise and accounting for around a third of headline inflation, South Africa’s statistics agency said.
South Africa imports most of its fuel, leaving it vulnerable to swings in global energy prices. Its regulated petrol price rose about 5% in September before surging 12% in October.
Economists divided on final 2026 rate decision
The central bank has raised its policy rate twice since the start of the Iran war, including at its last meeting in September.
Economists are divided on what the bank will do in mid-November at its one remaining scheduled meeting of 2026.
Nedbank economist Johannes Khosa expects another 25 basis point rate hike as inflation is projected to remain above the central bank’s target until at least the last quarter of 2027.
Bureau for Economic Research chief economist Lisette IJssel de Schepper said the bank could keep interest rates unchanged as underlying price pressures, reflected in the level of core inflation, are relatively contained.
She said October’s fuel price increase could push overall inflation above 5% at the next release.
Trade unions and some political parties have called for the government to offer fuel price relief, along the lines of the levy reduction between April and June.
Finance Minister Enoch Godongwana will deliver a mid-year budget speech from about 1200 GMT.
