Consumer Inflation
By Natalie Naidoo
South Africa’s headline consumer price index (CPI) inflation increased to 2.8% year-on-year in April 2025, up from 2.7% in March, according to Statistics South Africa (Stats SA). This slight uptick was primarily driven by higher prices in food and non-alcoholic beverages, particularly meat and coffee.
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Food and Non-Alcoholic Beverages Lead Inflation Rise
Inflation for food and non-alcoholic beverages (NAB) rose to 4.0% in April, marking the highest annual rate since September 2024. The monthly change for this category was 1.3%, the largest increase since October 2023.
“The rise in food and NAB inflation was mainly due to higher meat prices, particularly for beef products such as stewing beef, mince and steak. Meat prices increased by 2.3% on average between March and April, the highest monthly rise since January 2023 (2.5%). Meat is the largest weighted group in the food and NAB category and accounts for 5.1% of total household spending,” said Stats SA.
Additionally, the price index for oils and fats increased by 1.4% between March and April, taking the annual rate to 4.8%. Cooking oil is 6.1% and brick margarine is 5.5% more expensive than a year ago.
Hot beverages also saw significant price increases. “Annual inflation for hot beverages rose to 15.2%, the highest print since September 2024 (15.8%). Instant coffee continues to record the highest rate within this category, with prices increasing by 20.2% in the 12 months to April. Coffee prices are elevated across the globe. The World Bank commodity index for coffee beans (robusta) increased by 28.1% over the same period,” Stats SA reported. 
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Alcohol and Tobacco Prices Also Increase
The category of alcoholic beverages and tobacco experienced an annual increase of 4.7%, up from 4.1% in March. However, the monthly increase for this category slowed from 1.6% in March to 1.3% in April. Stats SA attributed this to the continued impact of excise tax increases.
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Fuel Prices Provide Some Relief
On a positive note, fuel prices declined by 3.2% between March and April. “Overall, motorists are paying 13.4% less for fuel than a year ago. The price for a litre of inland 95-octane petrol softened to R21.62 from R22.34 in March. The average price for diesel eased to R21.94 from R22.80,” Stats SA noted.
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Economic Outlook and Policy Implications
Despite the slight increase, the annual inflation rate remains below the South African Reserve Bank’s (SARB) target range of 3% to 6%. This provides some room for monetary policy adjustments. The SARB is scheduled to announce its next monetary policy decision on May 29. 
Speculation about a potential change in the inflation target has intensified, especially after Deputy Finance Minister David Masondo hinted at an imminent adjustment. Reserve Bank Governor Lesetja Kganyago has long advocated for a lower target to boost economic competitiveness. However, Finance Minister Enoch Godongwana remains cautious due to concerns about the impact on the poor and unemployed. 
A lower inflation target could lead to fewer interest rate cuts, strengthening the rand. The central bank held its main lending rate steady in March after three cuts, citing global trade tensions and domestic fiscal challenges. 
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