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South Africa\u2019s two-year inflation expectations climbed, complicating the central bank\u2019s efforts to anchor expectations around its 3% target.<\/p>\n
Average inflation expectations two years ahead, the measure the central bank closely watches when setting interest rates, rose to 3.9% in the second quarter from 3.6% previously, according to a survey published by the Stellenbosch-based Bureau for Economic Research on Tuesday.<\/p>\n
Read: Sarb takes aim at R90bn cost of cash<\/p>\n
The survey was conducted between May 18 and June 4, before the US-Iran 60-day ceasefire deal reopened the Strait of Hormuz, sending global energy costs lower and triggering a decline in local fuel prices, which should see inflation ease in coming months.<\/p>\n
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Morgan Stanley upbeat on South African assets despite headwinds
Real take-home pay at a two-year low<\/p>\n
Between survey rounds, annual inflation accelerated to 4.5% from 3% and gasoline prices hit a record.<\/p>\n
South African Reserve Bank Governor Lesetja Kganyago recently warned that policymakers would need to act on rising inflation expectations to prevent the impact of the oil shock from fanning broader price pressures.<\/p>\n
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\u201cWe now have inflation expectations, and expectations have drifted away from target,\u201d he told broadcaster CNBC Africa. \u201cAnd what we have seen is that all price setters are expecting inflation higher, and that is what the central bank has got to act on, reining in those expectations.\u201d<\/p>\n
Read:
Nedbank: Growth slows, inflation peaks and rates stay higher for longer
Consumers under pressure: What\u2019s needed to boost confidence<\/p>\n
Policymakers, who raised interest rates by 25 basis points to 7% at their last meeting, will deliver their next policy decision on July 23.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n
#Inflation #expectations #rise #South #Africa #rate #decision<\/p>\n","protected":false},"excerpt":{"rendered":"
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