South Africa inflation expectations eased with 3% target, Sarb says

South Africa’s central bank credited its new 3% inflation target for already helping guide expectations lower across the economy, after the formal adoption of the goal last month.

Inflation expectations two years ahead, which policymakers use to guide their decisions on interest rates, fell to a record low of 3.7% in the fourth quarter from 4.2%, data released on Friday showed.

“Encouragingly, surveyed inflation expectations came down further in the fourth quarter of 2025, likely in response to the lowering of South Africa’s inflation target to 3%,” the South African Reserve Bank said in its December Quarterly Bulletin published on Monday.

“On average, the inflation expectations of all surveyed groups fell below 4% across the entire forecast horizon.”

Finance Minister Enoch Godongwana last month officially endorsed a lower 3% inflation target in an update to the nation’s budget.

His announcement followed a long campaign advocating for such a move by