Best news in 21 years for South Africa
South Africa’s inflation rate dipped to a 21-year low of 3.2% on average in 2025, with prices across the nation broadly in line with the new inflation target rate.
Consumer price inflation ticked marginally higher in December to end the year at 3.6%, up from 3.5% in November, with the month-on-month change in the consumer price index (CPI) at 0.2%.
Stats SA said that the average inflation rate for 2025 was 3.2%, which is the lowest rate since 2004’s 1.4%.
The next most recent year in which average inflation was lower than 3.2% was 1969 (3.0%), 56 years ago.
Finance Minister Enoch Godongwana recently announced a new inflation target of 3% following calls from the South African Reserve Bank (SARB), with inflation broadly in line with this figure.
Looking at the specifics of the December figure, the annual rate for food and non-alcoholic beverages (NAB) remained stable at 4.4%.
Meat inflation, however, continued its upward trajectory, rising 12.6% in December from 12.2% in November.
“The rate was -0.4% in December 2024, which shows how quickly meat inflation has accelerated over the year,” said Stats SA.
Beef inflation remains at high levels amid a major foot-and-mouth disease outbreak. For instance, beef steak recorded an annual price change of 29.4% in December.
Inflation for cereal products rose from 1.7% in November to 2.1% in December, with several key items experiencing faster price increases.
This includes brown bread (accelerating from 0.5% to 1.0%), white bread (1.3% to 1.7%) and spaghetti (1.7% to 3.1%).
Inflation for maize meal declined for a second straight month, slowing to 9.5% in December from 9.9% in November.
The milk, other dairy products & eggs category remained in deflationary territory at -1.1%, which was primarily led by cheaper milk products.
Cheese, however, bucked the trend, with cheddar prices rising by 9.0% in the 12 months to December, higher than the 4.9% rise recorded in November.
The annual rate for oil & fats slowed to 4.6%, with sunflower oil softening to 6.2% from November’s 6.6%. Olive oil is also 8.0% cheaper than it was a year ago.
Prices for non-alcoholic beverages rose by 4.2% in the year to December, which was higher than November’s rate of 3,7%. Inflation for cold beverages increased from 1.4% in November to 2.2% in December.
Higher rents
Stats SA also conducted its quarterly survey of housing rents in December, with actual rentals increasing by 0.8% in Q4 2025 compared to Q3.
The annual change for actual rentals was 3.7%, with townhouses rising by 4.6%, flats by 4.2% and houses by 3.3%.
Domestic workers saw their pay increase by 3.8% annually in December, but this was lower than the 4.1% rise recorded at the end of 2024.
Fuel prices also rose by 0.6% in the final year to December. Diesel was up by 3.7% and petrol by 0.1%.
Fares for long-distance buses rose by 38.6% between November and December, but this sharp increase is due to the rise in festive-season travel.
Despite this monthly increase, bus prices were 5.6% lower this December than in December 2024.
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