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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 20, 2025

Consumer Inflation

February 2025

In February 2025, the Consumer Price Index (CPI) held steady at 3.2%, mirroring January’s figure and slightly below the anticipated 3.3%.

This stability was largely due to specific sector increases:

  • Housing and Utilities: Rose by 4.4%, contributing 1.0 percentage point.
  • Food and Non-Alcoholic Beverages: Increased by 2.8%, contributing 0.5 percentage point.
  • Restaurants and Accommodation Services: Climbed by 4.6%, contributing 0.3 percentage point.

Year-on-year, goods inflation rose to 2.5% in February, up from 2.4% in January. Conversely, services inflation eased to 3.8% from 4.0% the previous month. Despite the modest pace of price increases, inflation continues to diminish household purchasing power, as reflected in declining general imports in South Africa.

Many households are increasingly reliant on short-term credit, heightening their exposure to interest rate shifts and price increases, despite the slower pace.

On the positive side, the Monetary Policy Committee (MPC) reduced the interest rate by 25 basis points in January 2025. Factors such as moderate inflation, sluggish Q4 2024 growth, improved and steady electricity supply, and positive market sentiment suggest that the South African Reserve Bank (SARB) might consider further rate cuts in 2025, assuming inflation expectations remain stable during the first half of the year. Additional rate reductions could alleviate financial pressure on consumers and boost medium-term demand.

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Mining Production and Sales for March 2026

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