The consumer price index (CPI) increased to 3.1% in March from 3% in February. While this is still very close to the South African Reserve Bank’s (SARB) new 3% inflation target, economists caution that the longer the Middle East war lasts, the worse things will get for South Africans.
Statistics South Africa (Stats SA) on Wednesday said six of the 13 categories in the CPI basket recorded higher annual rates, including restaurants & accommodation services, education, transport, housing & utilities, information & communication, and recreation, sport & culture.
The CPI release for March covers data collected before the sharp fuel price increases that were introduced on 1 April. The impact of these higher prices on inflation will be included in the next CPI release that will be published on 20 May.
Inflation for April might be higher
Dr Elna Moolman, Standard Bank Group head of South Africa macroeconomic research, said March’s inflation is well within SARB’s tolerance band of 1 percentage point to either side of the 3% target.
She noted that the data released does not yet reflect the full inflationary impact of the Middle East war, which will have a more significant impact on April’s inflation rate, given the spike in fuel prices.
Stats SA found that education inflation in 2026 has increased significantly, with tuition fees increasing by 5.4%, higher than the 4.5% increase recorded in 2025. “The education component in the CPI is updated once a year in March,” said Stats SA.
“Primary and secondary education rose by 6.2% (from 5.0% in 2025), while tertiary education increased by 4.2% (from 3.7% in 2025). Private secondary schools recorded the sharpest rise in 2026, climbing by 7.5%.”
Rental inflation
The March CPI figures include results for the latest quarterly survey of housing rents. Actual rents increased by 4.0% in the first quarter of 2026, up from the 3.7% rise recorded in the fourth quarter of 2025.
In the first quarter, rents for houses increased by 3.7%, townhouses by 5.1% and flats by 4.2%.
Moolman said the SARB might view the rise in rental inflation in March as reflective of a recovery in the housing market and consumer demand, although ultimately its interest rate decisions will in the foreseeable future largely depend on how the war unfolds and how this impact on oil prices and the rand exchange rate.
“The SARB will pursue its new 3% inflation target, but if the war ends relatively soon, the bank may not have to hike interest rates,” she said.
Food inflation eases for a second consecutive month
According to Stats SA, the annual rate for food and non-alcoholic beverages slowed further to 3.6% in March from 3.7% in February and 4.4% in January.
Four of the 11 food and non-alcoholic beverages categories are in deflationary territory, including fruits & nuts; vegetables; cereal products; and milk, other dairy products & eggs.
“Meat recorded its second monthly decrease, with beef prices moderating between February 2026 and March 2026,” said Stats SA.
“Declines were recorded for stewing beef (-4.2%), steak (-2.0%), mince (-1.9%) and offal (-1.5%). Biltong fans can also breathe a sigh of relief, with prices edging lower by 0.2%.
“The annual rate for meat also slowed, easing to 11.6% from 12.2% in February. Beef products registered lower rates.”
