Key facts
- South African consumer confidence improved to minus 13 points in the third quarter from minus 19 in the second quarter.
- Inflation expectations for this year remained unchanged at 4.4%.
- Forecasts for 2027 and 2028 inflation declined to 4.0% and 3.8%, respectively.
- Year-on-year inflation in July stood at 4.3%.
- The South African Reserve Bank targets inflation of 3% with a 1-percentage-point tolerance band.
South African inflation expectations stabilized in the third quarter, according to a survey commissioned by the central bank. The average forecast for headline consumer inflation this year remained unchanged at 4.4% from the second-quarter survey. Projections for 2027 and 2028 declined to 4.0% and 3.8%, respectively.
Separately, consumer confidence in South Africa improved in the third quarter, with the consumer confidence index rising to minus 13 points from minus 19 in the second quarter. The rebound was largely driven by stronger confidence among lower-income households, who were more insulated from recent interest rate hikes and benefited from lower food inflation. The Middle East conflict has put pressure on household budgets through higher fuel prices and fears of inflation.
In July, the latest month for which data is available, inflation stood at 4.3% year-on-year. The central bank's target for inflation is 3%, with a 1-percentage-point tolerance band. The bank kept its main lending rate unchanged in July, following a rate hike in May.