South African inflation hits target

South African consumer inflation in February 2026 hit the South African Reserve Bank’s (SARB) inflation target of 3%. This is the first time the target was hit since it was announced in the 12 November 2025 Medium Term Budget Policy Statement (MTBPS).

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The SA CPI Feb data was sourced from Statistics South Africa

The MTBPS gave the SARB some flexibility as the inflation target is 3% plus or minus 1 percentage point. So 3% is the target, but it can vary between 2% and 4%.

Meat prices eased in February

Statistics South Africa said meat prices eased in February to 12.2% year-on-year after a 13.5% year-on-year jump in January. This easing should continue later this year as authorities curb the spread of foot and mouth disease.

Overall food inflation slipped to 3.7% year-on-year in February after being steady at 4.4% year-on-year for three consecutive months.

Goods inflation eased in February

Goods inflation eased to 1.9% year-on-year in February from 2.7% year-on-year in January and 3.0% year-on-year in December. Services inflation slipped to 3.8% year-on-year in February after being steady at 4.2% year-on-year in January and December.

The trimmed mean measure, which excludes volatile prices, dipped to 2.4% year-on-year in February from 2.7% year-on-year in January. Some central banks use this as their inflation target measure as it is less volatile. Other central banks prefer a core measure that excludes food and energy. February inflation hit the target on both measures.

Easing inflation could have led to rate cut in March

If Israel and the US had not attacked Iran on 28 February, then there would have been a good chance that the repo rate would have been cut on 26 March.

At the last Monetary Policy Committee (MPC) meeting in January, the committee voted four to two to keep the repo rate steady. Most economists before the Iran war expected a rate cut in March. Inflation was expected to keep near the target.

However, the closure of the Strait of Hormuz due to the war has meant that the crude oil price has moved above $100 per barrel. That in turn saw the daily basic petrol price increase to 1 590 cents per litre (c/l) on 17 March from 923 c/l on 27 February.

The BFP 17 March data was sourced from the Central Energy Fund

If the basic fuel price stays at the 17 March level, then there will be a 560 c/l increase on 1 April. Consequently, the Gauteng retail petrol price will swing to a 19.8% year-on-year increase from a 9.1% year-on-year decline in March.

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