Economists welcome 3% inflation, warn of future increase

Economist, Dawie Roodt, says the latest inflation data is a positive sign for the economy, noting that price pressures are easing faster than many had anticipated.

Stats SA on Monday announced that annual CPI slowed to 3% in February, down from 3.5% in January, with prices rising by just 0.4% month-on-month.

#SAInflation || Inflation eases further in Feb 2026. South African annual consumer price inflation cooled to 3,0% in February 2026 from 3,5% in January 2026.

Listen here for more: https://t.co/mcK7LOcvX5 #StatsSA #KnowYourStatsZA #CPI #GovZAUpdates pic.twitter.com/U0K0yZH2Y4

— Statistics South Africa (Stats SA) (@StatsSA) March 18, 2026

However, he cautioned that global pressures – including ongoing tensions in the Middle East – could still drive up oil prices and place renewed pressure on the rand.

Despite the encouraging trend, Roodt warned that the outlook remains uncertain, with global conflict and currency volatility likely to reverse some of the gains.

For now, however, the latest data suggests inflationary pressures are easing, offering South African consumers some relief from rising living costs.

Stats SA’s Chief Director for Price Statistics, Patrick Kelly, says the softer inflation outcome was largely driven by declines in housing costs, food and non-alcoholic beverages, as well as insurance and financial services.

He attributed the slowdown to several key factors, including a delay in the implementation of new medical aid rates, a significant drop in fuel prices, and slower increases in medical service costs.

“First, there was a delay in the implementation of some new medical aid rates. Secondly, there was a substantial decline in the price of fuel in February. Fuel prices decreased by 3.1% month-to-month compared to a rise of 3.9% recorded in February 2025. This contributed to an annual decline of 10.1% in the fuel index. And thirdly, prices for medical services increased at a slower pace compared with the same month last year,” Kelly explained.

Fuel prices fell by 3.1% month-on-month in February, contributing to an annual decline of 10.1% in the fuel index.

Inflation in food and non-alcoholic beverages also eased to 3.7%, with some staple items – including rice, bread and certain meats – becoming cheaper.

Meat prices, in particular, recorded their first monthly decline in nearly a year, easing to 12.2% from 13.5% in January.

#SAInflation || Beef products recorded large monthly price decreases, including beef offal, stewing beef, beef mince and beef steak.

🔗: https://t.co/igWNGVfnyC#StatsSA #KnowYourStatsZA #CPI #GovZAUpdates pic.twitter.com/qSDS4BDdKd

— Statistics South Africa (Stats SA) (@StatsSA) March 18, 2026

Written by: Realeboga Nke