South Africa Inflation Hits 10-Month High at 3.5% on Food Price Surge

South Africa's consumer price inflation rose to 3.5% year-on-year in July 2025, marking the highest level since September 2024 and up from 3.0% in June. This increase was largely driven by rising food and non-alcoholic beverage prices, which accelerated to 5.7%, with meat—particularly beef—and vegetables being major contributors, as beef prices surged nearly 29% over the past year. Municipal tariffs for water, electricity, refuse collection, and sewage removal also rose significantly, adding to inflationary pressures on households. Fuel prices increased after four months of decline, pushing the annual fuel inflation rate from -11.2% in June to -5.5% in July. Despite these rises, core inflation, which excludes volatile food and energy prices, remained steady at 3.0%, within the South African Reserve Bank's target range of 3% to 6%. The Reserve Bank recently cut its main lending rate to 7.00% and has signaled a desire to lower the inflation target to 3%, though the finance minister has yet to approve this change amid concerns that sustained increases in essentials could necessitate future rate hikes.