South Africa Inflation on Track for 3% Target in 2026, Reserve Bank Governor Says
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South African Reserve Bank Governor Lesetja Kganyago said inflation is on track to meet the central bank’s new 3% target in 2026, noting that price pressures have remained stable.
With annual inflation for 2025 due to be released on Wednesday, Kganyago said the SARB expects the full-year figure to come in between 3.2% and 3.4%.
South Africa’s government and central bank lowered the inflation target to 3% last year for the first time in 25 years, with a tolerance band of one percentage point on either side, and the SARB had previously expected to reach the new target by 2027.
Speaking to Reuters on the sidelines of the World Economic Forum in Davos, Kganyago said the central bank expects inflation to average 3.6% this year and that the breakdown across categories supports the view that South Africa is on course to meet the 3% target in 2026.
The SARB’s main lending rate is currently 6.75%, and Kganyago said the bank’s projection model still leaves room for a further two 25-basis-point cuts this year.
The first meeting of the SARB’s Monetary Policy Committee this year is scheduled for next week.
