The Bureau for Economic Research’s latest survey shows a decrease in the 2025 inflation forecast for South Africa to 4.3%, below the central bank’s target. Current inflation stands at 3.2%. Economic growth expectations are also below government predictions, reflecting political strife regarding budget plans.
A recent survey by the Bureau for Economic Research (BER) revealed a decline in the average inflation forecast for South Africa for 2025, dropping to 4.3% from 4.5%. This figure is now below the South African Reserve Bank’s target of 4.5%, which aims to maintain inflation within a 3%-6% range.
As of January, headline consumer inflation reached 3.2% year-on-year. February’s inflation data is anticipated to be similar, prompting economists surveyed by Reuters to predict that the Reserve Bank will maintain its current interest rates during their upcoming meeting.
The South African Reserve Bank adopts a cautious monetary policy approach, particularly under the current geopolitical climate influenced by global trade tensions and potential domestic VAT increases. Additionally, the average inflation forecast for 2026 remains steady at 4.6%, while analysts expect inflation to be around 3.9% this year and 4.3% next year.
Respondents to the BER survey estimated economic growth at 1.2% for 2025, significantly lower than the government’s projection of 1.9% in the recent budget announcement. Political tensions are evident as various parties oppose the budget, primarily due to the proposed VAT increase.
The survey indicates a declining trend in inflation expectations among economists and business leaders in South Africa, with forecasts dropping to 4.3% for 2025. Despite a rise in current consumer inflation, the Reserve Bank is likely to maintain its interest rates. Economic growth projections remain pessimistic compared to government forecasts, highlighting ongoing political challenges.
Original Source: www.zawya.com
