South Africa inflation surges marginally due to high food cost

South Africa's inflation rose marginally in April 2025 due to higher food prices but remained below the central bank's target range, statistics agency data revealed.

Headline consumer inflation stood at 2.8% last month compared with 2.7% in March, while in month-on-month terms, inflation was at 0.3% in April from 0.4% in March.

According to economists' forecasts, annual inflation would remain steady at 2.7%, below the central bank's 3% to 6% target range.

South African Deputy Finance Minister David Masondo highlighted that a new inflation target could be announced soon, leading to speculation that it could feature in Wednesday's budget presentation.

South African Reserve Bank Governor Lesetja Kganyago has for years stressed his preference for a lower inflation target, saying it is needed to make the economy more competitive.

The prospect of a lower inflation target has lifted the rand, with economists saying a lower target would reduce the likelihood of further interest rate cuts.

"If the Treasury announces a lower inflation target as part of the budget later today, it's likely that the SARB will stay on the sidelines for some time," said Jason Tuvey, deputy chief emerging markets economist at Capital Economics.

With the next monetary policy announcement by the central bank being scheduled for May 29, Annual inflation for food and non-alcoholic beverages increased to 4.0% in April, the highest annual rate since September last year, Statistics South Africa said.