Consumer inflation slowed to an annual rate of 3.5% in November from 3.6% in October, driven by lower fuel costs.
Data published by Stats SA on Wednesday shows the first moderation in the headline Consumer Price Index (CPI) rate in three months, bringing inflation closer to the Reserve Bank’s official 3% target and keeping it well within the tolerance band of plus or minus one percentage point.
The softer-than-expected outcome strengthens the case for the Reserve Bank to continue cutting interest rates at its first monetary policy meeting in January.
The November print comes after the release of the Bureau for Economic Research’s (BER) inflation expectations survey on Friday — closely watched by the Bank — where respondents expect headline inflation to average 3.8% in 2026 and 3.7% in 2027, the lowest levels since the survey began in 2011.
On a monthly basis, prices declined by 0.1%, offering a modest reprieve for consumers ahead of the December holiday period. The slowdown was largely driven by softer fuel and transport costs, though food prices remained elevated in some categories.
Fuel prices declined by 2.2% between October and November, with annual fuel inflation slowing to just 0.1%. That helped pull overall transport inflation down to 0.7% year on year from 1.5% in October.
Food inflation, however, edged slightly higher to 4.4% year on year, up from 3.9% previously. Meat prices continued their upward climb, rising by 12.2%, reflecting ongoing supply chain pressures and increased demand. In contrast, prices for vegetables and fruit dropped by 2.3% and 2.4%, respectively, helping to ease pressure on household food budgets.
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Housing and utility inflation remained sticky at 4.5%, underpinned by higher electricity and gas tariffs, which rose 7.9% compared to the same month last year. Water and municipal services also recorded above-average increases of 7.0%.
Core inflation, which excludes the more volatile categories of food, non-alcoholic beverages, fuel, and electricity, were slightly higher — 3.2%, from 3.1% in October.
That measure, which is closely watched by the Reserve Bank as a guide to underlying price trends, remains within its tolerance range, but continues to suggest some stickiness in service-related costs.
Services inflation climbed to 4.1% in November, up from 4.0%, while goods inflation eased to 2.9%.
“The latest print will support the view that the inflation trajectory has undergone a downward adjustment,” Oxford Economics head of Africa Macro Jacques Nel wrote in a note.
According to PSG Financial Services chief economist Johann Els, “a stronger rand and lower oil prices should lead to a significant petrol price cut in January 2026 and reduce petrol inflation.”
Els expects overall CPI “to stay in the 3.5%–4% range through 2026, close enough to the Reserve Bank’s 3% target to prevent the need for rate hikes”, and expects a 25-basis-point rate cut in the first half of next year.
Els said the environment is “still challenging for meat prices, but manageable overall, thanks to low consumer goods prices, lower petrol, modest job growth, and potential rate cuts”.
“Inflation is likely on a mild downcycle in 2027, averaging closer to 3%, down from the 3.7% expected in 2026,” he added.
Update: December 17 2025
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