South African inflation expectations rose sharply in the second quarter of 2026, a survey showed on Tuesday, as the oil price shock triggered by made analysts, business people and trade unions all raise their forecasts.
The quarterly survey is commissioned by the central bank and guides its thinking on the appropriate level of interest rates.
The average forecast of analysts, business people and trade unions was for headline consumer inflation of 4.4% this year, up from 3.6% in the previous survey.
The average forecasts for 2027 and 2028 rose to 4.2% and 3.9%, respectively, also up from 3.6%. Those forecasts are important as the central bank says interest rate changes affect the economy with a lag of about 12 to 24 months.
Inflation quickened to 4.5% year on year in May (ZACPIY=ECI), the highest reading since July 2024.
The central bank targets inflation of 3% with a 1-percentage-point tolerance band either side of that.
The bank raised its policy rate by 25 basis points to 7% at its last meeting in late May, its first hike in three years.
Its next rate announcement is scheduled for July 23.