SARB Governor Lesetja Kganyago has said several times that the bank will push for a lower inflation target of 4.5% instead of the 3-6% band, although this is yet officially to be announced. Photographer: Ayanda Ndamane/ Independent Newspapers.
Nicola Mawson
While inflation for December last year, showed a month-on-month increase of 0.1 percentage points, that figure for 2024 was a sharp decrease at 4.4% when compared to the 6% print seen in the previous year.
In its statement, published on Wednesday morning, Statistics South Africa said that the main contributors to the inflation rate in December were housing and utilities, which gained 4.4%, as well as alcoholic beverages and tobacco, which gained 4.3%.
Miscellaneous goods and services increased 6.6%, while food – long a concern for economists as the rate has been stubbornly high – along with non-alcoholic beverages grew below the official inflation rate at 2.5%.
The gain in the cost-of-living figure for December 2023 was 5.1%.
On Tuesday, Investec chief economist Annabel Bishop said that inflation for December was anticipated to come in at close to 3% year-on-year.
Bishop predicted that 2025’s inflation print would come in at 3.5%, with 2026’s number expected to show growth of 4.6%. This, she noted, was in comparison to the South African Reserve Bank’s (SARB’s) target at 4.5%.
SARB Governor Lesetja Kganyago has said several times that the bank will push for a lower inflation target of 4.5% instead of the 3-6% band, although this is yet officially to be announced.
Old Mutual chief economist Johann Els said the lower inflation print was a pleasant surprise. He said his prediction for December was expected to be 3.2%.
Els said inflation was likely to stay in the mid-range of the 3-6% range this year.
Both Bishop and Els expect a rate cut next week of 0.25 percentage points.
BUSINESS REPORT