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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
April 23, 2025

Consumer Inflation

March 2025

In March 2025, the Consumer Price Index (CPI) fell to 2.7% from 3.2% in February, under the 3.0% forecast.

This decrease was mainly due to:

  • Housing and Utilities: Up 4.4%, contributing a 1.0 percentage point.
  • Food and Non-Alcoholic Beverages: Up 2.7%, adding a 0.5 percentage point.
  • Restaurants and Accommodation Services: Up 4.2%, adding another 0.3 percentage point.

Year-over-year, goods inflation was 2.0%, down from 2.5% in February, and services inflation eased to 3.5% from 3.8%. Despite slower price increases, inflation continues to reduce household purchasing power across South Africa, leading many to rely on short-term credit, increasing their vulnerability to interest rate changes.

On a positive note, the Monetary Policy Committee (MPC) cut the interest rate by 25 basis points in January but maintained it in March. The Reserve Bank remains cautious about inflation and interest rates, especially due to the US-China tariff war’s potential impact on price stability. Factors like moderate inflation, slow economic growth, improved electricity supply, and positive market sentiment influence the Bank’s interest rate decisions. However, price stability is a primary concern, determining future interest rate cuts in late 2025.

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More Coverage

Employment Statistics in South Africa

Q1 2025
The employment statistics for the first quarter of 2025 present a mixed picture across different sectors, as detailed in the table above. Some sectors experienced increased employment compared to the fourth quarter of 2024, while others saw a decline in job opportunities during this period. Overall, the unemployment rate edged higher from 31.9% in the previous quarter to 32.9% in Q1 2025. Meanwhile, the expanded unemployment rate decreased slightly from 41.1% to 40.3% during the same timeframe.

A Positive Turning Point for Global Trade and Markets

Analysing the Impacts of the US-China Deal and Its Broader Economic Implications
The recent negotiated agreement between the United States and China marks a significant milestone in international trade relations, providing a much-needed breather for the global economy. By agreeing to reduce tariffs for a 90-day period—U.S. tariffs cut from 145% to 30%, and Chinese tariffs from 125% to 10%—both nations have demonstrated a renewed commitment to cooperation.

Manufacturing Production

March 2025
In March 2025, manufacturing production in South Africa declined by 0.8%, following a 3.2% contraction in February. This decrease contrasted with the upward movement in the Purchasing Managers’ Index (PMI), which rose from 44.7 in February to 48.7 in March.

Navigating International and Domestic Winds

South Africa’s Economic Prospects
In a world of interconnected economies, global developments unfailingly ripple through national borders. For South Africa, recent international and domestic events offer a complex tapestry of challenges and opportunities that could shape its economic trajectory.

Gold and Foreign Exchange Reserves

April 2025
The African International Liquidity Position, reflected by Net Gold and Foreign Exchange Reserves, grew in both USD and Rand terms as of April 2025. Despite a nearly 60c Rand depreciation against the dollar, reserves increased, boosted by a 4.7% rise in gold prices, which remain 41.4% higher than in 2024.
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