South Africa’s inflation rate edged slightly higher in December, according to the latest Consumer Price Index (CPI) figures released by Statistics SA on Wednesday. Inflation rose to 3.6% in December 2025 from 3.5% in November.
Prices increased by 0.2% compared with November, meaning consumers paid slightly more for everyday goods and services during the month. Economists said the small rise was expected.
Frank Blackmore, the lead economist at KPMG South Africa, said December CPI numbers, which came in at 3.6% for December 2025, are slightly higher than the 3.5% recorded in November. “Core inflation also rose marginally to 3.3% from 3.2% last year. The main contributor to this inflation was housing and utilities, which added one-third or 1.2 percentage points of that 3.6%, and most notably there it was obviously both electricity price increases at 7.9% and water at 7% that did most of the increase there.”
Blackmore added that given this December number for inflation of 3.6%, 2025 on average had an inflation rate of only 3.2% for the year. “Our view for inflation for 2026 will be slightly higher than this rate, and the reason is not because we see month-on-month changes increasing that much but because of the base effects in calculating the inflationary numbers.”
Tando Ngibe, a senior manager at Budget Insurance, said the CPI results announced on Wednesday mean that prices in South Africa are still rising, but at a relatively slow and manageable pace. “Practically, for consumers, this means that your cost of living is not running away from you, but pressure hasn’t disappeared either. Essentials like food, especially meat, housing costs, and transport continue to put strain on budgets more than the headline number suggests.”
Ngibe added that while inflation looks calm on paper, many households still feel it in their monthly spend. “The important takeaway is that interest rates are unlikely to drop sharply in the short term, but they also aren’t under pressure to rise. So, borrowing costs should therefore remain relatively stable for now.”
Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money, said we can see that inflation ticked slightly higher from 3.5% in November to 3.6% in December. “What’s most interesting is to look at this from a consumer perspective for 2025 as a whole. I think one of the standout features is that the projected inflation rate of 3.2% for 2025 is the lowest in 21 years. This is down from 4.4% in 2024 and 6% in 2023.”
Parry added that a practical tip going forward is to focus on controlling what you can. “Focus on where the inflation is hitting your budget the hardest, like groceries, fuel, rent, and lock in savings where possible – whether it be through smart buying, switching service providers, or avoiding new debt while the rates remain high.”
FNB senior economist Koketso Mano said that headline inflation is aligned with their and the market expectation. “Updating our model with this print suggests that headline inflation will soften over much of this year, starting with a deceleration to below 3.5% y/y in January. This will be supported by the fall in fuel prices, while food and core inflation could be relatively stable.”
Mano added that as the year progresses, projected growth in the oil market surplus and a supported rand should keep fuel prices contained while also extending to overall imported, transport, and food costs. “In addition, the current downward pull on cereal and vegetable prices presents downside risk to food inflation in the near term. In line with this, we note the risk that goods inflation is softer than anticipated. Services inflation continues to normalise, but the pace could be softened by surveyed inflation expectations that have moderated – even those of price-setting agents.”
Annabel Bishop, Investec’s chief economist, said the fuel price saw a small 29c/litre lift, making a small 0.07% contribution to the m/m CPI outcome. “Housing and utilities made a small, not unusual, 0.1% seasonal contribution as well.”
Bishop added that January’s fuel price cut of -66c/litre will aid inflation lower by about -0.2% m/m, while February is building for a larger -77c/litre cut. “This will also help subdue some of the tendency of the start of the year’s inflationary pressures from other sources. Food (and non-alcoholic beverages) price inflation remained at 4.4% y/y.”
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