Finance

South Africa is beating some of its biggest competitors

Jonathan Hoyle

 ·11 Aug 2026

While South Africa’s July inflation rate surprised many economists, the country is still consistently outperforming other African markets.

The inflation rate for July in South Africa came in at 5%, while many experts had forecast it would rise to approximately 4.7%.

The rate, at 5%, put inflation above the Reserve Bank’s current target of 3% and outside its 1-percentage-point tolerance band.

While this may seem like bad news for South Africans, the Reserve Bank noted that property prices had been the largest contributor to the rate, rather than food inflation or other everyday factors.

The inflation rate can also be viewed in the context of other large African economies, where South Africa has seen rates significantly lower than many others.

Countries such as Nigeria, Ethiopia and Egypt have seen their inflation rates reach above 10% in recent months, with Nigeria reaching 15.91% in June.

Other countries, such as Morocco, experienced deflation at the start of the year, a dangerous situation that often causes a country’s economic growth to stagnate.

Of the ten major African economies which were analysed, only Angola had seen a significant decline in its inflation rate.

The other countries which were analysed saw their inflation rates stay the same or increase, with the largest percentage increase since the start of the year coming from Ethiopia, increasing by 4.1 percentage points since January.

Another key economic indicator which is useful in comparing South Africa to other African countries is Gross Domestic Product (GDP).

South Africa’s GDP is the largest on the continent, reaching approximately $440 billion at the end of 2025, with an estimated GDP per capita of $7,500.

This GDP per capita is significantly higher than that of other African countries; Algeria is the closest rival among the analysed countries, with a per capita GDP of roughly $4,880.

Inflation rates of 10 African economies in 2026

Estimated GDP and GDP per capita of 10 African economies at the end of 2025

South Africa’s strong position

Global inflation increases have largely been attributed to volatile oil prices driven by the closure of the Strait of Hormuz.

The Strait was closed following conflict in the Middle East between the U.S. and Iran at the end of February, with uncertainty over ceasefire negotiations in the following months.

The oil supply crisis has been felt by South Africa, but the Reserve Bank has noted that its impact has been muted in recent months.

Many expected the fuel price increase to drive logistics costs higher, creating a knock-on effect on consumer goods, but food inflation only increased by approximately 1.6% in June.

In a recent video by The Economist, 15 emerging markets, including South Africa, were analysed based on how the closure of the Strait of Hormuz could affect their economies.

The analysis examined each country’s dependence on the Middle East for oil supplies, as well as other economic buffers that help the country withstand global uncertainty.

The analysis found that South Africa was in a relatively strong position to withstand the global oil crisis, with relatively low dependence on the area and adequate economic buffers.

The study indicated that South Africa had far more economic resilience against this global uncertainty than other emerging markets, such as Pakistan, Egypt, and Ethiopia.

This creates renewed hope for South Africa’s economy, with the Reserve Bank sharing the sentiment that the country can lower its inflation in the coming months.

The Reserve Bank is currently forecasting that inflation will return to the country’s target range in 2027, and lowered its inflation forecast in the last Monetary Policy Committee (MPC) meeting.