23
April 2025
South Africa's inflation rate fell to 2.70% in March 2025 from the prior month’s 3.20% reading
Adriaan Pask
Chief Investment Officer, PSG Wealth
Event
• South Africa's inflation rate fell to 2.70% in March 2025 from the prior month’s 3.20% reading, its lowest level since June 2020- falling below the SARB's 3% to 6% target range.
• The inflation rate for food and non-alcoholic beverages declined to 2.70% from 2.80% in February.
• After falling from 3.40% the previous month, the core inflation rate—which does not include volatile categories like food, non-alcoholic beverages, fuel, and energy—dropped to 3.10%, the lowest since September 2021.
• Consumer prices increased by 0.40% m/m in March, which was less than the 0.90% increase in February 2025.
The Impact
• The South African rand strengthened on 23 April, at 14h40, trading at 18.60 against the dollar.
• On the stock market, the ALSI posted a 0.33% gain.
• South Africa’s 2-year government bond yield was recorded at 7.57%, while the yields for the 5-year and 10-year bonds were 9.23% and 11.11%, respectively.
The Assessment
• The latest inflation numbers does give SARB scope to cut interest rates at its next monetary policy meeting in May,
depending on domestic and global economic conditions.
• Our solutions continue to focus on actively managed fund strategies, drawing on both local and international portfolio management expertise. These strategies are designed to perform effectively, particularly when factoring in inflation trends.
• South Africa’s next inflation rate data will be released on Wednesday, 21 May 2025.