Bloomberg reports that consumer inflation expectations for two years ahead fell to a record low of 3.7% in the fourth quarter from 4.2%, data released on Friday showed.
The SA Reserve Bank (SARB) said in its December Quarterly Bulletin published on Monday: “Encouragingly, surveyed inflation expectations came down further in the fourth quarter of 2025, likely in response to the lowering of South Africa’s inflation target to 3%. On average, the inflation expectations of all surveyed groups fell below 4% across the entire forecast horizon.” The bank reiterated that the new target would help anchor inflation expectations at a lower level over the medium term, and widen room for the prospect of permanently lower interest rates.
The decline in inflation expectations may encourage the Monetary Policy Committee to cut interest rates again when it holds its next meeting in late January, after reducing the benchmark repurchase rate by 25 basis points to 6.75% last month. Cumulatively, the SARB reduced interest rates by 100 basis points this year.
- Read the full original of the report in the above regard by Ntando Thukwana at Moneyweb
Get other news reports at the SA LabourNews home page