South Africa’s inflation is on course to meet the central bank’s newly set target of 3% in 2026, according to Reserve Bank Governor Lesetja Kganyago. Speaking on Tuesday, Kganyago highlighted that prices in the country have remained stable, reinforcing optimism about the inflation outlook.
With the annual inflation data for 2025 due to be released on Wednesday, Kganyago said the South African Reserve Bank (SARB) expects it to fall between 3.2% and 3.4%.
Last year, South Africa’s government and central bank lowered the inflation target for the first time in 25 years to 3%, allowing a one-percentage-point tolerance on either side. The bank had initially forecast that this target would be reached by 2027.
“We expect that inflation this year would average 3.6% … if you break that inflation across the categories … all of them have got a three handle which then says that we are on course even for 2026 to meet our new inflation target,” Kganyago told Reuters at the World Economic Forum meetings in Davos.
Currently, the central bank’s main lending rate stands at 6.75%. Kganyago added that the bank’s projections leave room for an additional two 25-basis-point rate cuts this year.
The first Monetary Policy Committee meeting of the year is scheduled for next week, where further decisions on interest rates are expected.
