The South African Reserve Bank (SARB) is cautioning that South Africans should expect a slight increase in the rate of inflation in the coming year.

The bank has revised its forecast upwards, citing elevated electricity prices as the primary driver.​

Chief Economist, Chris Loewald, announced that inflation is now expected to reach 3.6 % next year. This is a marginal increase from the bank’s earlier projection of 3.3%

Global inflation continued to ease over the past year due to energy and food prices moderating as well as currencies strengthening in many economies.

In South Africa, the local currency has been strengthening against the US dollar trading just over R17 against the US Dollar.

Loewald says the weakening US dollar is now proving to be a key driver in the global fight against rising prices.

“The dollar rand has increased quite a lot against the dollar. So, the dollar’s depreciation over the past year has helped that disinflation process in emerging markets. We ask whether or not tariffs are starting to feed through into inflation numbers. I think the tentative answer is yes”

[THREAD] WATCH NOW: The SA Reserve Bank’s is hosting the Monetary Policy Forum, where it is releasing the October 2025 Monetary Policy Review (MPR). The MPR covers domestic and international developments affecting monetary policy.

Governor Lesetja Kganyago and members of the… pic.twitter.com/z6JA6etgcN

— SA Reserve Bank (@SAReserveBank) October 23, 2025

Reserve Bank Governor Lesetja Kganyago says the country is continuing to face deep structural challenges despite generally better near-term economic results.

Kganyago says the current global volatility, could erode some of the recent gains.

“It is a very volatile environment that we are in. And all of these tensions, trade and geopolitical, are likely to slow down global growth and keep inflation in focus. Here at home, growth has exceeded expectations in the second quarter, lifting the projected annual growth rate slightly. Continued reforms remain crucial to unlocking South Africa’s growth potential. Inflation has stayed low and stable, closer to 3%.”

The central bank forecasts that headline inflation may rise to 3.6 % in 2026 before easing towards the 3% objective by the end of the forecast period.

Earlier this year, the central bank forecast that headline inflation will be at 3.3% in both 2025 and 2026, and 3% in 2027.

This upward revision reflects higher-than-expected electricity price inflation following the recent price corrections by the National Energy Regulator of South Africa (NERSA).