By: ThinkBusiness Africa
South Africa’s headline consumer price inflation (CPI) rose slightly to 3.6% year-on-year in December 2025, according to the latest data released by Statistics South Africa (Stats SA) on Thursday. While the figure marks a modest increase from November’s 3.5%, the annual data reveals a historic cooling of prices across the economy.
The average inflation rate for the full year of 2025 settled at 3.2%, the lowest annual average since 2004 (1.4%). This milestone places South Africa comfortably within the South African Reserve Bank’s (SARB) newly established 3% target, signaling a successful period of disinflation.
The month-on-month increase of 0.2% between November and December was primarily driven by seasonal festive trends and specific supply-side shocks.
Long-distance bus fares surged by 38.6% during the December holiday rush. Despite this monthly spike, bus travel remains 5.6% cheaper than it was in December 2024.
According to the data, Food and non-alcoholic beverages (NAB) inflation remained stable at 4.4%, but meat prices continued to surge. Driven by supply shortages linked to foot-and-mouth disease, meat inflation hit 12.6% in December.
Despite the year-end tick-up, 2025 was a year of significant relief for the South African consumer. Core inflation—which excludes the volatile categories of food, fuel, and energy—fell to 3.6% in December, down from 3.7% in November.
The December print aligned closely with market expectations and provides a stable backdrop for the upcoming Monetary Policy Committee (MPC) meeting on January 29, 2026.
Economists suggest that with average inflation for 2025 resting at 3.2%—just above the 3% “sweet spot” target—the SARB has significant room to lower interest rates to stimulate the country’s modest GDP growth.
On Monday, the International Monetary Fund (IMF) projected a 1.4% GDP growth for South Africa in 2026.
