The better-than-expected headline inflation of 3% in February is welcome, but has now already been overtaken by a highly negative inflationary outlook.

In commenting on this easing in the CPI from 3,5% in January, Prof. Raymond Parsons, economist from the North-West University (NWU) Business School, says it is no longer only the external oil price shock that will have a likely future impact on the economy, but also the extent to which it will coincide with several domestic price increases on 1 April.

“Apart from the fuel price rises driven by international oil prices, the adjustments to the fuel and Road Accident Fund levies, the carbon tax, as well as the Eskom tariff increases, must now be added.”

He explains that the convergence of these factors on 1 April creates the prospect of a concentrated cost shock for consumers and business.

“On present evidence, the outlook for headline inflation in 2026 as a whole is therefore now likely to average out at closer to 4%. This outcome is likely to intensify cost-of-living pressures, especially for the poor, and will also increase business operating costs. Both the economic and psychological impact of such a clustered shock should not be underestimated. Mitigating steps need to be considered,” Prof. Parsons concludes.