CPI Holds Steady in December

Consumer Price Inflation (CPI) remained subdued in December 2026.

In the last month of 2026, year-on-year inflation was recorded at 3.6%, according to Statistics South Africa (Stats SA).

Month-on-month inflation in December was 0.2%.

In October 2025, year-on-year inflation had been 3.6% and in November it was 3.5%, indicating that the current inflation rate is fairly stable.

Stats SA also provided inflation statistics by province. Two provinces had year-on-year inflation rates of more than 4% in December. These were Limpopo and North West, each of which recorded an inflation rate of 4.1%.

Inflation rates (in descending order) for the other provinces were: Western Cape (3.8%), KwaZulu-Natal (3.6%), Gauteng (3.5%), Northern Cape (3.3%), Mpumalanga (3.3%), Free State (3.2%), and the Eastern Cape (3.1%).

According to Stats SA the primary drivers of December’s inflation rate were insurance and financial services (which increased by 7.0% year-on-year), housing and utilities (which increased by 4.9% year-on-year), and food and non-alcoholic beverages (increased by 4.4%).

Stats SA also revealed statistics for overall inflation for 2025. For the year it came in at 3.2%. This is the lowest yearly inflation rate recorded this decade – in 2021 overall yearly inflation had been 4.5%, in 2022 it was 6.9%, in 2023 it was 6.0%, and in 2024 it was recorded at 4.4%.

In the last fifty years overall annual inflation for a full year has been lower than 3.2% only once. In 2004 annual inflation over a full year had been 1.4%.

The 3.6% rate is easily within the new target inflation band of the South African Reserve Bank (SARB). Last year the bank said it would be targeting a new inflation rate of 3% (with a one-point tolerance band in either direction), rather than its previous inflation target of between 3% and 6%.

Bheki Mahlobo, economics and policy editor at The Common Sense, said: “With inflation still inside the SARB’s target range, the Reserve Bank is likely to keep cutting interest rates this year. That should gradually reduce pressure on South African households, because lower rates mean cheaper monthly repayments on things like home loans and other debt.”

Mahlobo added that: “We expect a further 50 basis points of cuts in 2026, which would take the benchmark interest rate from 6.75% to 6.25%. However, we think the SARB will hold rates steady at its first meeting of 2026 next Thursday, and only restart its cutting cycle from March.”