South African Inflation Calculator

The Consumer Price Index (CPI) is South Africa's official measure of inflation, compiled monthly by Statistics South Africa (Stats SA). It tracks the percentage change in the price of a basket of goods and services typically purchased by South African households.

The CPI basket contains approximately 391 items grouped into 13 COICOP 2018 divisions: Food & Non-Alcoholic Beverages; Alcoholic Beverages & Tobacco; Clothing & Footwear; Housing & Utilities; Furnishings & Household; Health; Transport; Information & Communication; Recreation, Sport & Culture; Education; Restaurants & Accommodation; Insurance & Financial Services; and Personal Care & Miscellaneous. Stats SA collects prices from shops, online retailers, and direct transaction data feeds, covering 21 collection areas across South Africa's urban areas. The current series is referenced to December 2024 = 100, following a rebase in January 2025.

The annual headline CPI inflation rate was 4.3% in the Year to July 2026 (released 19 August 2026), down from 5.0% in June. It sits in the upper half of the SARB's 3% target band (±1 percentage point).

The jump was driven mainly by a sharp fuel price increase following the Middle East conflict. The largest annual contributors were Housing & Utilities (+5.2%, contributing 1.2 percentage points), Transport (+4.9%, contributing 0.7pp - a sharp turnaround from deflation), and Insurance & Financial Services (+5.7%, contributing 0.6pp). Goods inflation rose to 3.4% (from 1.8%) and services to 4.6% (from 4.2%). Meat prices remained elevated at +9.4% due to ongoing foot-and-mouth disease outbreaks.

The CPI basket includes 391 items across 13 COICOP 2018 divisions. The 2025 weights (based on the 2022/23 Income and Expenditure Survey) are:

• Housing & Utilities: 24.10% (the largest)
• Food & Non-Alcoholic Beverages: 18.23%
• Transport: 13.89%
• Insurance & Financial Services: 10.41%
• Restaurants & Accommodation: 6.12%

The remaining categories are Information & Communication (5.47%), Alcohol & Tobacco (4.64%), Clothing & Footwear (3.90%), Furnishings (3.33%), Recreation, Sport & Culture (2.94%), Personal Care & Miscellaneous (2.78%), Education (2.41%), and Health (1.78%). The most recent weights update (January 2025) added items like air fryers, e-hailing services, and streaming subscriptions while removing landline phone fees and satellite TV decoders.

Core CPI excludes food, non-alcoholic beverages, fuel, and energy - items with volatile prices that can temporarily distort headline inflation. In July 2026, Core CPI was 4.2%, up from 4.1% in June.

The SARB also closely monitors:

• Services inflation (5.0% in July 2026) - more dependent on domestic costs (wages, rents) and considered more "persistent" than goods inflation.
• Goods inflation (3.4% in April 2026, up from 1.8%) - more exposed to global commodity and rand exchange-rate movements.
• CPI excluding administered prices - excludes electricity tariffs, fuel, and water charges set by government/regulators.

The SARB officially targets headline CPI, but uses these underlying measures to assess whether price pressures are temporary or entrenched, particularly important when assessing the impact of fuel price shocks like the 2026 Middle East conflict.

Stats SA publishes the CPI monthly, typically in the third week following the reference month. The July 2026 CPI was released on 19 August 2026, and the August 2026 CPI is expected on 23 September 2026. The Producer Price Index (PPI) is also published monthly, usually a week after the CPI.

Stats SA achieves very high response rates from surveyed outlets - the April 2026 release had a 99.2% response rate. Prices are collected throughout each month from approximately 30,000 outlets across South Africa's 21 urban collection areas. Stats SA collects: in-person prices from shops; web-scraped prices from online retailers; and direct transaction data from large retail chains. Some specialised items (like education, insurance, and rents) are surveyed quarterly or annually rather than monthly. The full statistical release is published on the Stats SA website along with detailed Excel files containing all sub-indices and average prices.

Not exactly. The CPI measures price changes for a fixed basket of goods and services, while cost of living measures show the change in spending needed to maintain a given standard of living - they can allow for substitution between products when relative prices change.

For example, if beef prices rise sharply (as they did in 2025-26 due to foot-and-mouth disease), the CPI records this as inflation. A pure cost-of-living measure might assume households substitute to chicken, dampening the measured impact. The CPI is an average across all household types, but Stats SA also publishes CPI by expenditure decile (income group), which often shows that lower-income households experience higher inflation than the headline figure - because food, transport, and electricity make up a larger share of their spending. The Stats SA Personal Inflation Calculator lets households estimate their own inflation rate based on actual spending patterns.

Stats SA publishes CPI data for all nine provinces, with each province having a weight reflecting its share of total household expenditure. Based on the 2025 weights update:

• Gauteng: 35.87% (largest)
• Western Cape: 18.06%
• KwaZulu-Natal: 14.58%
• Eastern Cape: 7.66%
• Mpumalanga: 6.41%
• Limpopo: 6.09%
• North West: 5.38%
• Free State: 4.14%
• Northern Cape: 1.82% (smallest)

Provincial weights were updated in January 2025 based on the 2022/23 Income and Expenditure Survey. Stats SA publishes provincial CPI data for the all-items index and food index, allowing comparisons of inflation experiences across regions. Inflation rates can vary materially between provinces due to differences in spending patterns, transport costs, and local market conditions.

The South African Reserve Bank targets annual headline CPI inflation at 3%, with a ±1 percentage point tolerance band. This is a new framework adopted on 12 November 2025, when Finance Minister Enoch Godongwana announced the change at the Medium Term Budget Policy Statement.

The new target replaces the previous 3-6% range that had been in place since South Africa formally adopted inflation targeting in February 2000. Under the old framework, the SARB preferred inflation closer to the 4.5% midpoint. The change brings South Africa closer to international best practice (Brazil moved to 3% in 2024, and most developed-market central banks target 2%). The tolerance band allows for flexibility around shocks - SARB Governor Lesetja Kganyago has emphasised the target is a "continuous" objective rather than a strict ceiling. The new framework is being implemented over two years, with the SARB pursuing the target on a continuous basis.

As at July 2026, the SARB Policy Rate (SPR, formerly known as the repo rate) is 7.00%. The Monetary Policy Committee raised the rate by 25 basis points on 28 May 2026, effective 29 May 2026, with four members favouring the increase and two preferring no change.

The corresponding prime lending rate is 10.50% (SPR + 3.5 percentage points), which most South African banks use to price home loans, vehicle finance, and credit cards. The SPR had fallen 150 basis points from its 2024 peak of 8.25% through cuts in late 2024 and November 2025, reaching 6.75% before the May 2026 increase. The MPC cited intensified inflation risks and the possibility of second-round effects from overlapping price shocks; headline CPI had risen to 4.0% in April 2026 and services inflation to 4.6%. The next scheduled MPC meeting follows the SARB's bi-monthly cycle.

The SARB's primary tool is the SARB Policy Rate (SPR) - the interest rate at which commercial banks borrow from or deposit with the central bank. When inflation is too high, the SARB raises the SPR, making borrowing more expensive across the economy and slowing demand. When inflation is too low or growth needs support, the SARB lowers the rate to encourage spending.

The SPR was previously called the "repo rate" - this older name is still widely used. SPR changes flow through to:

• The prime lending rate (SPR + 3.5pp) - used for most home loans and vehicle finance
• Variable savings and deposit rates
• The rand exchange rate (higher rates tend to support the rand)

The Monetary Policy Committee meets six times per year on fixed dates. The SARB also uses open market operations and reserve requirements as secondary tools. The SARB's constitutional mandate is to "protect the value of the rand in the interest of balanced and sustainable growth", which it pursues through inflation targeting.

The SARB's March 2026 Monetary Policy Committee statement projects inflation will rise temporarily to around 4% in Q2 2026 due to the Middle East conflict pushing fuel prices higher (with fuel inflation expected to exceed 18% in Q2). However, the SARB expects this to be transitory - with headline inflation projected to return to 3% by late 2027 under the baseline forecast.

Key projections:

• 2025 actual: 3.2% (lowest in 21 years)
• 2026 forecast: 3.3% (revised down from 3.5% in November 2025 review)
• 2027 forecast: 3.2%
• 2028 target: 3.0%

The SARB Quarterly Projection Model also shows the SPR settling near 6.05% by end-2027, implying further gradual cuts as inflation approaches target. Risks remain elevated: a prolonged Middle East conflict could push inflation higher; further rand weakness above ZAR 19/USD would add imported-inflation pressure; and electricity tariff increases continue to put upward pressure on the rate.

SARB Policy Rate changes flow through quickly to South African home loans because most are priced off the prime lending rate (SPR + 3.5 percentage points), which is currently 10.50%.

South African home loans are typically variable-rate, meaning monthly repayments adjust within weeks of an MPC decision. To illustrate impact, a 20-year, ZAR 1 million bond at prime (10.50%):

• At 10.50% prime: approximately ZAR 9,984/month
• At 12.00% prime (the 2024 peak): approximately ZAR 11,000/month

The SPR fell 150bp from the 2024 peak of 8.25% to 6.75%, before the 25bp increase to 7.00% in May 2026 lifted prime back to 10.50%. Fixed-rate home loans are less common in South Africa than in the UK or US; most fixes are 1-3 years and are priced off swap rates rather than prime alone. The SARB MPC meets on a bi-monthly cycle; check the SARB site for the next scheduled date. Most economists now expect rates to remain on hold for longer due to Iran war uncertainty - the previously projected 2026 cuts have been postponed.

Housing & Utilities is the largest contributor to CPI, with a basket weight of 24.10%. In April 2026, this category rose +5.2% annually and contributed 1.2 percentage points to the headline 4.0% rate.

Key drivers:

• Electricity - reflecting Eskom tariff increases approved by NERSA. Electricity makes up around 3.4% of the CPI basket and tends to rise faster than headline.
• Actual rentals for housing - rose 4.0% in Q1 2026, up from 3.7% in Q4 2025. Townhouses (+5.1%), flats (+4.2%), houses (+3.7%).
• Owners' equivalent rent - imputed cost for owner-occupied housing.
• Domestic worker wages - rose 3.7% in Q1 2026.
• Water supply & municipal services - rose around 7% as municipalities pass through rate increases.

The ongoing energy crisis and need for infrastructure investment continue to put upward pressure on utility costs.

Food & Non-Alcoholic Beverages inflation was +2.9% in April 2026, easing from 3.6% in March as earlier food-price pressures continued to moderate.

The standout driver remains meat prices (+9.4% annually), caused by ongoing outbreaks of foot-and-mouth disease affecting cattle farming and trade restrictions. Several food categories were actually in deflation in March: fruits and nuts, vegetables, cereal products, and dairy. With a basket weight of 18.23%, food inflation significantly impacts overall CPI - particularly for lower-income households where food is a larger share of spending. Food price inflation is driven by global commodity costs, the rand exchange rate, local agricultural conditions including droughts and disease, and rising input costs like fuel, electricity, and labour for food production and distribution.

The shift to the new 3% target has significant implications for wage settlements. The previous target midpoint of 4.5% had been built into many multi-year wage agreements - including the South African government's 3-year public sector wage agreement signed in February 2025, which set 5.5% for 2025/26 and CPI-linked increases for the two outer years (assumed at around 4.5%).

With the new 3% target, those CPI-linked increases will likely come in lower than originally assumed. SARB Governor Kganyago has noted that inflation expectations already moved closer to the new target after the November 2025 announcement - two-year-ahead expectations fell to a record low of 3.7% in Q4 2025. Some wage agreements may need to be renegotiated, while new agreements are being struck with lower CPI assumptions. The transition is expected to take place over the next two years as old agreements expire and new ones reflect the lower target.

South African social grants - including the Older Persons Grant, Disability Grant, Child Support Grant, Foster Child Grant, and Care Dependency Grant - are adjusted through the annual National Budget process each February rather than being automatically indexed.

The Minister of Finance considers CPI inflation, fiscal capacity, and poverty levels when setting grant amounts. Recent budgets have generally included increases to maintain real value, though increases have sometimes lagged inflation during high-inflation periods. The Older Persons Grant and Disability Grant rose to around ZAR 2,310/month in 2025, while the Child Support Grant rose to around ZAR 560/month. CPI is also commonly used in industrial relations and wage negotiations as a benchmark. South Africa's SASSA (South African Social Security Agency) administers payments to over 19 million beneficiaries. Some private occupational pensions include inflation-linked features (often capped), and the National Treasury issues Inflation-Linked Bonds (ILBs) that adjust returns based on CPI for institutional investors.

Inflation erodes the real value of money. With Stats SA CPI at 5.0% and the prime lending rate at 10.50%, South African savers can currently earn meaningful positive real returns on many savings products - a relatively favourable environment by international standards.

Common inflation-protection options include:

• Money market accounts and fixed deposits - typically pay around prime - 0.5% to prime - 1.5%, well above inflation right now.
• RSA Retail Savings Bonds - both fixed-rate (currently around 9.50% for 2-year) and inflation-linked (CPI + 3.0% to 3.50% real return).
• Tax-Free Savings Accounts (TFSAs) - up to ZAR 36,000 contribution per year (ZAR 500,000 lifetime), all returns tax-free.
• Government Inflation-Linked Bonds (ILBs) - capital and interest both adjust by CPI.
• Property and equities - historically beat inflation over long periods but with greater short-term risk.

Pension contributions and growth are typically reported in nominal terms; sustained inflation above the SARB's new 3% target would meaningfully erode pension purchasing power over time.

The 1980s were South Africa's highest-inflation decade in modern history, averaging nearly 15% per year. Annual CPI inflation peaked at 18.5% in 1986 during a period of:

• International economic sanctions against the apartheid government
• Capital flight and severe rand weakness
• Political instability and labour unrest
• High government deficits and accommodative monetary policy

The 1990s also saw double-digit inflation in the early years - 15.8% in 1991, 13.9% in 1992 - but inflation gradually declined through the decade. The transition to democracy in 1994, fiscal discipline, and the introduction of formal inflation targeting in February 2000 helped anchor expectations and reduce inflation. Since 2000, average annual inflation has been around 5.7%, dropping to just 3.2% in 2025 - the lowest in 21 years. The 2025 reading was a key factor in the National Treasury's decision to lower the inflation target to 3% in November 2025.

An inflation calculator helps illustrate how the value of money has changed over time. Common uses include:

• Calculating what an item that cost ZAR 100 in 1980 would cost today, adjusted for inflation.
• Estimating how much a salary needs to increase to maintain the same purchasing power.
• Understanding the real value of historical prices when reading historical financial information.

The Money Snap calculator above uses official Stats SA CPI data covering 65 years (1960-2025). Key benchmarks: ZAR 100 in 1980 would be worth approximately ZAR 3,417 today; ZAR 100 in 1994 (start of democratic era) would be worth approximately ZAR 560 today; ZAR 100 in 2000 would be worth approximately ZAR 371 today. Stats SA also publishes a free CPI Headline Index on its website with full historical data, and provides tools for calculating personal inflation rates based on individual spending patterns.