For a nation wearily accustomed to the relentless creep of rising prices, the news feels almost surreal. According to the latest quarterly Survey of Inflation Expectations released by the Bureau for Economic Research (BER) for the first quarter of 2026, South Africa is on the cusp of an unprecedented period of price stability. The survey, which pools the insights of professional economists, business managers, and trade union officials, projects that inflation will average a record low of 3.6% over the next five years.
If realised, this forecast would mark a historic milestone for the South African economy. It would represent the longest sustained period of low inflation since the democratic era began, and would sit comfortably within the South African Reserve Bank’s (SARB) preferred target range of 3% to 6%. For consumers, businesses, and policymakers alike, the implications are profound and far-reaching.
The BER survey, conducted in the first quarter of 2026, serves as a crucial temperature check on the economy’s vital signs. It asks a diverse group of economic actors where they see inflation heading—not just in the immediate future, but over the medium term. The consensus of 3.6% over a five-year horizon is the lowest ever recorded by the survey, signaling a profound shift in sentiment away from the high-inflation psychology that has often plagued the country.
The Breakdown: Who Believes What?
While the average figure of 3.6% is striking, the survey reveals interesting nuances among the different respondent groups. Professional economists, who tend to base their forecasts on complex econometric models, are the most optimistic, predicting inflation will average just 3.5% over the half-decade. Business managers, whose price-setting decisions directly influence the index, are only marginally less sanguine, with an average expectation of 3.6%.
The most cautious group, perhaps unsurprisingly, is the trade union officials. Representing workers whose wages are constantly eroded by the cost of living, they have a historical tendency to expect the worst. However, even this traditionally sceptical cohort has revised its outlook sharply downwards, forecasting an average of 3.8% over the next five years. While still slightly higher than the other groups, it is a significant vote of confidence from representatives of organised labour.
This broad-based alignment is significant. It suggests that the low-inflation outlook is not merely a theoretical exercise by a few academics, but a view that is permeating the real economy—from the factory floor to the boardroom.
What’s Driving the Optimism?
The projected decline to a 3.6% average is not an accident. It is the result of a confluence of factors, some global and some distinctly local.
Globally, inflation has moderated considerably from the post-pandemic peaks. Supply chains have healed, energy prices have stabilised, and major central banks around the world have tightened monetary policy to bring price growth under control. This imported disinflation provides a favourable tailwind for South Africa.
Domestically, the picture is more complex. A key factor is the South African Reserve Bank’s unwavering commitment to its inflation-targeting mandate. By maintaining a hawkish stance and keeping interest rates relatively high for an extended period, the SARB has anchored inflation expectations. The BER survey itself is a testament to this success: when businesses and unions believe the central bank will act to keep inflation low, they adjust their price-setting and wage demands accordingly, creating a virtuous cycle of stability.
Furthermore, recent improvements in some key areas of the domestic economy have contributed. While loadshedding remains a threat, the end of the most intense phase of electricity outages has allowed for some economic predictability to return. A more stable currency, improved logistics at ports, and a slight uptick in business confidence have all played a role in tempering price pressures.
What Does 3.6% Mean for Ordinary South Africans?
For a household already struggling to make ends meet, a percentage point here or there might seem abstract. But in real terms, low and stable inflation is one of the most powerful tools for improving living standards.
Firstly, it preserves purchasing power. When wages increase by 5% but inflation is at 6%, workers are effectively getting poorer. At 3.6%, any wage increase above that level represents genuine, tangible gains in what they can buy.
Secondly, low inflation paves the way for lower interest rates. With inflation expectations cooling, the SARB has already begun a long-awaited cutting cycle. The survey results will likely embolden the Monetary Policy Committee to continue reducing the repo rate. For the millions of South Africans with home loans, vehicle finance, or other debt, every interest rate cut translates directly into more money left in their pockets at the end of the month, freeing up cash for savings or consumption.
Thirdly, it creates an environment conducive to long-term investment and job creation. Businesses can plan with greater certainty when they know the value of money will not be rapidly eroded. This stability encourages capital expenditure, which in turn drives economic growth and, ultimately, employment.
A Note of Caution
Despite the overwhelmingly positive outlook, economists are quick to inject a note of caution. Forecasts are not guarantees. The global landscape remains fraught with geopolitical risks that could send energy and food prices soaring again. Domestically, structural reforms in energy, logistics, and crime prevention need to be sustained to ensure that the supply side of the economy can meet demand without generating price spikes.
Moreover, the 3.6% figure is an average. It does not mean that prices will never spike in a particular month or that every product category will see modest increases. It is a trend, a guide for the future.
For now, however, the BER survey offers a rare piece of unambiguously good news for the South African economy. It suggests that after years of volatility, the country is entering a period of macroeconomic stability that could form the foundation for sustainable growth. The challenge for government and business is to ensure that this low-inflation environment translates into the one thing it has not yet guaranteed: jobs.
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