FX.co ★ South Africa Sees Surprise Inflation Slowdown in August

South Africa witnessed a decrease in its annual inflation rate, registering at 3.3% in August 2025, down from a ten-month peak of 3.5% in July. This figure also came in below market expectations, which had anticipated a rate of 3.6%. Notably, the inflation rate continues to comfortably stay within the South African Reserve Bank's target range of 3% to 6%. The deceleration in inflation was primarily driven by a slowdown in food price growth, which fell to 5.2% from 5.7% in July, alongside a sharper decline in fuel costs, dropping to -5.7% compared to -5.5% previously. Meanwhile, the annual core inflation rate, which strips out volatile components such as food, non-alcoholic beverages, fuel, and energy, rose to 3.1% in August 2025, marking its highest level since March, up from 3% in the preceding month. On a month-to-month basis, the Consumer Price Index (CPI) experienced a slight decrease, falling by 0.1% in August, following a 0.9% increase in the prior month.