South Africans now expect inflation to be lower in 2025, suggesting prices are not rising as quickly as before, according to a survey conducted by the Bureau for Economic Research (BER).
This is despite general concerns about the economy’s growth.
According to a survey of the inflation expectations for the first quarter of 2025, respondents expect headline consumer inflation to average 4.3% this year, down from a previous estimate of 4.5%.
Looking further ahead, inflation is expected to rise gradually to 4.7% by 2027, stabilising slightly above the Reserve Bank’s target midpoint of 4.5%.
The five-year inflation outlook has also been revised marginally higher to 4.7%, reflecting persistent long-term cost pressures despite the recent slowdown in consumer price increases.
Among the most notable shifts in the survey was the decline in household inflation expectations, which fell to 5.7% for the year ahead, down from 6.6% in the previous survey. This marks the lowest level recorded in three years.
This likely means that consumers may be less concerned about rising prices in the short term.
The survey respondents include economic analysts, businesspeople and trade union officials, who each provide independent forecasts based on their respective industry perspectives.
Analysts are the most optimistic, expecting inflation to average 3.9% in 2025 before stabilising at 4.3% over the next two years. Business respondents foresee a slightly higher inflation rate of 4.6% this year, rising to 4.8% in 2026.
Trade union officials, however, remain more cautious, projecting an acceleration in inflation to 5.0% by 2027, citing ongoing cost pressures on wages and goods.
The survey also reflects lower wage growth expectations, suggesting that workers may not see notable salary increases in the near future.
Respondents expect average salaries and wages to rise 4.5% this year, down from an earlier forecast of 4.9%. Wage growth is expected to pick up slightly to 4.8% in 2026, though still lagging behind past increases.
The outlook for economic growth has also deteriorated. Respondents now expect GDP growth of just 1.2% in 2025, down from a previous estimate of 1.5%. Growth is projected to increase marginally to 1.4% in 2026, but remains well below the levels needed to drive job creation and economic recovery.
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