Consumer inflation softened to 3.5% in January from 3.6% in December, returning to its November 2025 level and keeping price growth well within the Reserve Bank’s 3%-6% target band.
The monthly increase in the consumer price index (CPI) was 0.2%, unchanged from December, according to Stats SA.
The moderation was largely driven by stable food inflation and lower fuel prices, though pressures within the basket remain uneven and, in some cases, intensifying.
Food inflation held steady at 4.4% for a third consecutive month. Within that, cereal product inflation slowed markedly to 0.6% from 2.1% in December. White rice remained in deflation at -11.0%, marking an eleventh consecutive month of annual price declines, while maize-meal inflation fell sharply to 2.6% from 9.5%.
Dairy and eggs continued to ease. Milk and other dairy products and eggs category registered -0.5%, compared with -1.1% in December. Eggs were 7.6% cheaper than a year earlier, with the average price of a tray of six at R22.90 in January, down from R24.51 a year ago and well below the December 2023 peak of R25.85.
By contrast, meat inflation accelerated further to 13.5% from 12.6% in December — the highest reading since December 2017.
Beef products recorded the steepest increases across the CPI basket, with steak up 31.2%, stewing beef 30.3% and beef mince 28.0%. Even lower-cost cuts were affected, as beef offal rose 17.2%. Pork inflation jumped to 19.5% from 11.5%.
Fuel provided the clearest disinflationary impulse. The fuel index declined 3.7% year on year, with petrol down 3.1% and diesel 5.4% month on month. Inland 95-octane petrol averaged R20.75 a litre in January — the lowest level since February 2022.
Administrative and services-related costs edged higher at the start of the year. Several banks increased annual fees in January, lifting the financial services index by 4.1% month on month and contributing to a 4.9% annual rate.
Back-to-school costs also featured: school jerseys rose 7.0% year on year, skirts and dresses 3.2% and school shoes 4.1%. In contrast, stationery prices declined sharply month on month, with pens down 9.8%, writing books 5.0% and printing paper 3.5%. Textbook prices fell 1.3% in January, bringing the annual rate to -3.3%.
Against this backdrop, the South African Chamber of Commerce and Industry (Sacci) noted business confidence strengthened at the start of 2026, supported by contained inflation, improved electricity supply and relatively stable financial market conditions. In its latest business confidence index release, Sacci indicated that lower inflation and moderating fuel prices were contributing to improved cost expectations for firms, while easing price pressures could help stabilise consumer demand.
However, Sacci cautioned that structural constraints and policy uncertainty remained binding on fixed investment. It stressed that time was limited to implement growth-enhancing reforms capable of converting improved sentiment into sustained economic expansion.
The chamber pointed in particular to the importance of fiscal consolidation and credible policy signals in the upcoming budget, warning that without decisive action, business confidence gains could prove fragile.
Investec’s Annabel Bishop said, “From an interest rate perspective (the forward rate agreement curve), markets expect the monetary policy committee to cut interest rates by 25 bps in March.”
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