The 1Q2026 Inflation Expectations Survey continued the downward trend that has been evident for some time.
Bureau of Economic Research (BER) Declined to 3.3% from 3.5% in the first quarter 2026 survey. This is for this year's annual average consumer inflation rate.
The first quarterly survey of economists, business executives and representatives of the trade union movement was conducted between 16 February and 5 March 2026.
Business executive respondents have the highest expectations among occupational groups. They expect 3.7% this year. He lowered his forecast from 3.9% in the fourth quarter survey.
Trade union officials adopt a middle path. Their forecast was 3.9% to 3.8%.
five year view
The BER asks professional groups about their expectations for the current year, next year, and the year after that. They also ask for a five-year vision. From a policy perspective, the current year and five-year perspectives are most important.
Accordingly, inflation expectations from a five-year perspective declined. Economists' five-year outlook remained at 3.2% between the two quarters, while trade union officials cut it to 3.7% from 3.8%. Business officials cut their forecast to 4.0% from 4.1%.
domestic scene
Houses are also surveyed. BER asks them for their 12-month and five-year outlook. Unlike professional groups, household respondents raised their expectations between the fourth and first quarters.
Accordingly, their 12-month view increased to 5.4% from 5.3%. Their 5-year outlook increased from 7.7% to 8.4%.
Why are inflation expectations surveys important?
The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) considers inflation Survey of expectations when deciding on repo rate.
Therefore, in 2001, SARB appointed BER to conduct quarterly surveys. The survey measures inflation expectations and other inflation-related macro-economic variables such as wage expectations.
As a result, it may have to raise the repo rate if inflation expectations rise above the inflation target of 3%. This is because rising inflation expectations may lead to higher wage demands. Businesses may even adjust their price increases upward if demand is strong enough.
To prevent high expectations from strengthening, the MPC may be forced to raise interest rates. Conversely, when inflation expectations fall as they have, the MPC may cut the repo rate.
What do you think the average consumer inflation rate will be this year?