JOHANNESBURG, Sept 16 - South African inflation expectations levelled off in the third quarter, according to a quarterly survey commissioned by the central bank, after a steep uptick in the prior quarter attributed to an oil price shock tied to the Iran war.
The survey, which is used by the central bank to inform its view on appropriate interest-rate settings, reported an average forecast from a mix of analysts, business representatives and trade union officials. That average forecast for headline consumer inflation this year was 4.4%, unchanged from the second-quarter survey.
Looking further ahead, the panel trimmed its outlook for the following two years. The mean projection for 2027 fell to 4.0% from 4.2%, while the average for 2028 declined to 3.8% from 3.9%.
The central bank highlights that changes to its policy rate affect the economy with a lag of about 12 to 24 months - a timing convention cited in the survey that underscores why multi-year expectations matter for policy calculation.
Recent price data show headline inflation at 4.3% year on year in July, the latest month for which statistics were available at the time of the survey.
The bank formally targets inflation at 3% with a tolerance band of plus or minus 1 percentage point either side of that target.
Policy action earlier in the year surprised some market participants when the central bank left its main lending rate unchanged in July, following its first rate increase in three years in May. The next interest-rate announcement is scheduled for September 23, creating an imminent policy milestone market participants will watch closely.
Context and implications
The survey results signal a pause in upwards revision to inflation expectations after the previous quarter's spike linked to elevated oil prices. The unchanged 2026 forecast and modest downward revisions for 2027 and 2028 reflect a measured reassessment of medium-term price pressures while recognising the lag with which policy operates.
Because the central bank uses these survey results to help set policy, the combination of current inflation readings, survey expectations and the policy-transmission lag will shape deliberations ahead of the September 23 announcement.