{"id":876768,"date":"2026-09-23T11:10:58","date_gmt":"2026-09-23T09:10:58","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=876768"},"modified":"2026-09-23T11:11:25","modified_gmt":"2026-09-23T09:11:25","slug":"inflation-surprise-for-south-africa-2","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/876768\/inflation-surprise-for-south-africa-2\/","title":{"rendered":"Inflation surprise for South Africa"},"content":{"rendered":"\n

Annual consumer price inflation rose only marginally in August 2026, with Stats SA recording the figure at 4.4%, up 0.1 percentage point from 4.3% in July 2026.<\/p>\n\n\n\n

This was a surprising result, with economists and analysts anticipating a steeper jump to around 5.0% for the month.<\/p>\n\n\n\n

According to Dr Elna Moolman, Standard Bank Group Head of South Africa Macroeconomic Research, the lower figure was largely thanks to lower petrol prices for the month.<\/p>\n\n\n\n

Petrol prices dropped by 52 cents per litre in August, easing the burden on consumer transport for the month.<\/p>\n\n\n\n

However, producers and transporters suffered as diesel prices shot up by R1.23 per litre that month.<\/p>\n\n\n\n

Moolman said that, on top of lower petrol prices, the rest of the inflation basket also showed little inflationary pressure.<\/p>\n\n\n\n

“This is a welcome indication that we’re not seeing the feared second-round inflation impact of the significant increase in fuel costs this year,” she said.<\/p>\n\n\n\n

However, this comes with the caveat that fuel costs in September\u2014and now expected for October<\/strong><\/a>\u2014have continued to rise.<\/p>\n\n\n\n

“This means that the Reserve Bank will likely remain concerned about the second-round effects of inflation,” she said.<\/p>\n\n\n\n

There is a high risk that South Africa will see a general rise in prices as a result of higher fuel costs.<\/p>\n\n\n\n

Moolman said that, even with the lower-than-expected inflation print, the Reserve Bank is likely to hike interest rates by 25 basis points on Wednesday.<\/p>\n\n\n\n

Positively, though, she said this could also mark the end of the hiking cycle, after which the central bank will hold rates for a while.<\/p>\n\n\n\n

“We expect the SARB to deliver some interest rate relief during the course of 2027,” she said.<\/p>\n\n\n\n

Petrol and diesel price adjustments since the Iran War broke out<\/h2>\n\n\n\n
Month<\/th>Petrol 95<\/th>Diesel 0.005%<\/th><\/tr><\/thead>
March<\/td>+R0.20<\/mark><\/td>+R0.65<\/mark><\/td><\/tr>
April<\/td>+R3.06<\/mark><\/td>+R7.51<\/mark><\/td><\/tr>
May<\/td>+R3.27<\/mark><\/td>+R5.27<\/mark><\/td><\/tr>
June<\/td>+R1.43<\/mark><\/td>-R2.62<\/mark><\/td><\/tr>
July<\/td>-R1.96<\/mark><\/td>-R3.59<\/mark><\/td><\/tr>
August<\/td>-R0.52<\/mark><\/td>+R1.23<\/mark><\/td><\/tr>
September<\/td>+R1.34<\/mark><\/td>+R3.15<\/mark><\/td><\/tr>
Total difference<\/strong><\/td>+R6.82<\/strong><\/td>+R11.60<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

If it weren’t for fuel prices, inflation would be sorted<\/h2>\n\n\n\n

According to Stats SA, the main contributors to the slightly higher inflation in August were housing and utilities (5.2%, contributing 1.3 percentage points) and transport (8.8%, contributing 1.2 percentage points).<\/p>\n\n\n\n

Insurance and financial services were also higher but weighted less in the headline figure (5.7%, contributing 0.6 percentage points).<\/p>\n\n\n\n

It is evident that fuel prices are still a major contributing factor to overall CPI, with CPI excluding fuel and
energy coming in at 3.5%\u2014well within range of the SARB’s 3% target.<\/p>\n\n\n\n

According to Investec Chief Economist, Annabel Bishop, fuel prices still remain a key driver of CPI inflation in South Africa.<\/p>\n\n\n\n

The fuel price inflation rate in the CPI index is now at 20.6% year-on-year, down from 23.3% in July and 35.3% in June. <\/p>\n\n\n\n

Excluding food, non-alcoholic beverages, fuel, and energy prices, the core measure of CPI inflation came in at 4.1% y\/y, down from 4.2% y\/y in July and 3.0% y\/y in February.<\/p>\n\n\n\n

Bishop noted that food and non-alcoholic beverage prices rose 0.7% y\/y and 0.0% m\/m, with deflation still feeding through from agricultural food production, which fell 6.6% y\/y in July. <\/p>\n\n\n\n

Producer prices have about a one-month lag relative to consumer prices, she said, adding that July saw grains and other crop prices fall 18.1% y\/y, reflecting price deflation this year and most of last. <\/p>\n\n\n\n

Notably, oil prices have not lifted South Africa’s food price inflation, and instead, food price disinflation has had a moderating effect on CPI, Bishop said.<\/p>\n\n\n\n

“The MPC meeting today is likely to deliver a 25bp hike on balance, although there is just above a 50% chance of this occurring,” she said.<\/p>\n\n\n\n

The finger on the scale towards a hike is that the targeted inflation measure has not spiked yet, and oil prices are very volatile, as is the situation in the Middle East.<\/p>\n","protected":false},"excerpt":{"rendered":"

CPI for August came in cooler than expected, but might not be enough to stop an interest rate hike.<\/p>\n","protected":false},"author":10,"featured_media":794242,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2102687402686836789","_sma_facebook_post_id":"191437357620492_2213899029430496","_sma_instagram_post_id":"18125159401861687","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[2829,7530,1498,499],"class_list":["post-876768","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-cpi","tag-inflation","tag-investec","tag-standard-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=876768"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876768\/revisions"}],"predecessor-version":[{"id":876770,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876768\/revisions\/876770"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/794242"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=876768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=876768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=876768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}