Investing.com — South African inflation expectations have declined further in the first quarter of 2026, with the average forecast for inflation over the next five years hitting the lowest level on record, according to a survey released on Monday.
The quarterly survey commissioned by the South African Reserve Bank showed that the average forecast of analysts, business people and trade unions was 3.6% inflation in 2026, 0.2 percentage points lower than the previous survey.
The average forecast for five-year inflation was also 3.6%, down 0.1 percentage points and the lowest reading ever. The survey guides the central bank's thinking on appropriate interest rate levels.
Analysts provided the lowest inflation forecast for this year, followed by businessmen and then trade unions.
Inflation was 3.5% year-on-year in January, the latest month for which data is available.
In November last year, the central bank had cut its inflation target to 3% with a tolerance band of 1 percentage point.
South African policymakers' commitment to keeping inflation low has boosted investor sentiment.
The central bank is cutting interest rates gradually from September 2024, with intermittent cuts in between. It set its policy rates at its last meeting in January, and some analysts predict it may do so again given global economic turmoil stemming from the US-Israel war against Iran.
The South African Reserve Bank's next interest rate announcement is due on 26 March.
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