South Africa inflation rises to 4.5% as record fuel prices point to October jump

South Africa’s headline consumer inflation rose to 4.5% year on year in September, up from 4.4% in August, data released on Wednesday, October 21, in Johannesburg showed. The modest increase keeps inflation further away from the central bank’s 3% target, and economists expect a sharper jump in October after fuel prices hit a record high.

The September figure was below a 4.7% forecast from economists polled. Transport inflation accelerated to 10.8% from 8.8% in August. The statistics agency said transport was the largest contributor to the rise and accounted for around a third of headline inflation.

Fuel prices drive the pressure

South Africa imports most of its fuel, leaving it exposed to swings in global energy prices. The regulated petrol price rose about 5% in September before surging 12% in October. That October increase is expected to feed into the next inflation release and could push overall inflation above 5%, according to Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research.

Central bank decision splits economists

The central bank has raised its policy rate twice since the start of the Iran war, including at its last meeting in September. Its one remaining scheduled meeting of 2026 is in mid-November, and economists are divided on what the bank will do.

Nedbank economist Johannes Khosa expects another 25 basis point rate hike. He sees inflation remaining above the central bank’s target until at least the last quarter of 2027. IJssel de Schepper said the bank could keep interest rates unchanged because underlying price pressures, reflected in core inflation, are relatively contained.

Fuel relief calls and budget speech

Trade unions and some political parties have called on the government to offer fuel price relief, along the lines of the levy reduction between April and June. Finance Minister Enoch Godongwana will deliver a mid-year budget speech from about 1200 GMT.