Annual inflation in South Africa was 3.0% in February, hitting the target inflation rate set by the South African Reserve Bank (SARB).

This is according to Statistics South Africa, which released data on inflation yesterday.

At 3.0%, inflation was lower than the 3.5% recorded in January, and the lowest recorded since June last year, when inflation had also been 3.0%.

Annual inflation has now been lower than 4.0% for 18 consecutive months. The last time inflation of more than 4.0% was recorded was in August 2024.

While inflation is now exactly at the SARB’s target rate of 3.0% it is unlikely that the central bank will lower interest rates when it meets next week. As The Common Sense argued a few days ago, South Africa could face some inflationary pressures in the near future, with the conflict in the Middle East likely to push energy prices higher, perhaps significantly so, which would raise transport and production costs across the economy, and which would translate into a rise in consumer prices. This means that the SARB, which has also traditionally been cautious about cutting interest rates, will likely leave interest rates where they are, in order to help keep inflation down.

This newspaper said: “Policymakers are expected to keep interest rates unchanged for now, signalling a wait-and-see approach as global geopolitical developments continue to shape energy prices and inflation expectations.” This is likely to still be the case despite the relatively tame inflation reported in February.