South Africa’s inflation rate eased to 3.5% in January, strengthening expectations of a potential interest rate cut when policymakers meet next month.
The data was released on Wednesday by Statistics South Africa in a statement published on its website.
The marginal decline from 3.6% recorded in December brings inflation closer to the central bank’s 3% target and sets the tone for monetary policy deliberations scheduled for March.
The latest figures highlight mixed price movements across food categories, with notable declines in cereals, dairy, and edible oils, while meat prices continued to surge.
What the data is saying
Consumer prices rose by 3.5% year-on-year in January, slightly lower than the 3.6% recorded in December. Food inflation remained unchanged at 4.4% for the third consecutive month, although price movements varied significantly across sub-categories.
- The annual rate for cereal products slowed to 0.6% in January from 2.1% in December, with white rice posting a deflation rate of 11.0%, marking its eleventh consecutive month of price decline.
- Maize meal inflation dropped sharply to 2.6% from 9.5% in December, while oils and fats softened to 4.0% from 4.6%, with olive oil 7.9% and butter 0.7% cheaper than a year ago.
- The milk, dairy products and eggs category recorded a negative 0.5%, compared to negative 1.1% in December, as fresh full-cream milk, low-fat milk, and eggs contributed to deflation, with a tray of six eggs averaging R22.90 in January, down from R24.51 a year earlier.
- Meat inflation accelerated to 13.5% from 12.6% in December, the highest since December 2017, driven by beef steak at 31.2%, stewing beef at 30.3%, beef mince at 28.0%, beef offal at 17.2%, and pork at 19.5%.
While falling prices in key staples such as rice, maize meal, and dairy products provided relief to consumers, surging meat prices continue to exert upward pressure on household budgets.
Get up to speed
The moderation in inflation comes as South Africa’s central bank weighs its next policy move amid global volatility and domestic cost concerns. At its last meeting, the Monetary Policy Committee held the benchmark rate steady at 6.75%, citing risks from global uncertainty and the potential impact of higher food and electricity prices on its revised 2026 inflation forecast of 3.3%.
- Policymakers have maintained a cautious stance despite easing price pressures, reflecting concerns about external shocks and supply-side risks.
- Food and electricity prices remain key drivers of inflation volatility in Africa’s most industrialised economy.
- The central bank’s 3% target sits at the lower end of its inflation target band, making sustained moderation critical before any aggressive easing cycle.
The January data, however, strengthens the case for a possible rate cut when policymakers convene on March 26.
What you should know
Nigeria also recorded a slight moderation in inflation in January, according to the National Bureau of Statistics. Headline inflation eased to 15.10% in January 2026 from 15.15% in December, reflecting a marginal improvement in price stability.
- The Central Bank of Nigeria has scheduled its 304th Monetary Policy Committee meeting for February 23 and 24, 2026.
- At its November 2025 meeting, the Monetary Policy Committee retained the Monetary Policy Rate at 27%, maintaining a restrictive stance to curb inflation and stabilise the foreign exchange market.
- The outcome of the upcoming meeting will be closely watched by investors and market participants for signals on the future direction of monetary policy.
Developments in both South Africa and Nigeria demonstrate how central banks across Africa’s largest economies are balancing moderating inflation with lingering macroeconomic risks as they chart their next policy steps.
