Consumer Price Inflation
By Thobeka Makume
South Africa’s annual consumer price inflation (CPI) remained steady at 3.2% in February 2025, unchanged from January, according to the latest data released by Statistics South Africa (Stats SA). This stability follows three consecutive months of increases from the lows observed in late 2024. 
Monthly Inflation Dynamics
On a month-to-month basis, the CPI increased by 0.9% in February. This uptick reflects specific sectoral price movements that have influenced the overall inflation rate.
Sectoral Contributions to Inflation
Several sectors have contributed notably to the annual inflation rate:
• Housing and Utilities: This category experienced a 4.4% increase, contributing 1.0 percentage point to the overall inflation rate.
• Food and Non-Alcoholic Beverages: Prices in this segment rose by 2.8%, adding 0.5 percentage points to the annual inflation rate.
• Restaurants and Accommodation Services: This sector saw a 4.6% increase, contributing 0.3 percentage points to the overall inflation rate.
Specific Product Price Movements
Within the broader categories, certain products exhibited notable price changes:
• Hot Beverages: The annual inflation rate for hot beverages accelerated to 14.6% in February, up from 13.7% in January. Instant coffee prices surged by 19.0%, marking the highest increase in six months, while black tea prices rose by 12.4%.
• Fuel Prices: Fuel prices increased by 3.9% between January and February, bringing the annual rate to -3.6% from -4.5% in January. The inland price for 95-octane petrol was R22.41 in February, up from R21.59 in January, though still lower than the R23.24 recorded a year ago.
Historical Inflation Trends
The current inflation rate of 3.2% aligns with the rates observed in January 2025 and December 2024. This steadiness follows a period of declining inflation in late 2024, where the rate reached a four-year low of 2.8% in October. The average annual inflation rate for 2024 was 4.4%, down from 6.0% in 2023 and 6.9% in 2022.  
Inflation Expectations and Monetary Policy
A recent survey commissioned by the South African Reserve Bank (SARB) indicates that the average inflation forecast for 2025 has declined from 4.5% to 4.3%, below the central bank’s target midpoint of 4.5%. The SARB aims to maintain inflation within a range of 3% to 6%. 
In its January 2025 meeting, the SARB’s Monetary Policy Committee (MPC) lowered the repurchase rate to 7.50%, citing the deceleration in inflation as a contributing factor. The MPC noted that while inflation started above 5% in early 2024, it slowed to 3% by December, primarily due to favorable goods prices. 
Global Economic Context
Globally, major economies are experiencing inflation rates that may remain above targets, leading to adjustments in monetary policies. For instance, the U.S. Federal Reserve left interest rates unchanged in January after three consecutive cuts, reflecting a cautious approach amid persistent inflationary pressures. 
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