South Africa’s (SA) annual headline inflation rate, as measured by the Consumer Price Index (CPI), edged up to 3.1% YoY in March from 3.0% in Febru expectations. MoM, headline inflation rose 0.6%. Core inflation, excluding the volatile food and non-alcoholic beverages, fuel and energy categories, fo increasing slightly to 3.1% YoY (+0.6% MoM) vs 3.0% in February.

Importantly, inflation remains well-anchored within the South African Reserve Bank’s (SARB) recently adopted inflation target of 3%, with a 1-ppt tolera of 2%–4%), replacing the previous 3%–6% range and reinforcing the central bank’s efforts to anchor expectations at a lower level to support long-term However, the March data should be viewed as a pre-shock snapshot, captured prior to a significant escalation in global geopolitical tensions.

There is Strait of Hormuz reflected in this latest inflation print, the reason being that any material disruption to oil supply routes would need time to filter throug locally and then into CPI. Fuel prices were still down 8.7% YoY in March, with the overall transport category (-1.6% YoY) acting as a modest drag on he The energy picture was still positive when the March inflation measurements were taken, and this dynamic is set to reverse.

As a net importer of refine exposed to higher global oil prices. The transmission mechanism is relatively direct: rising fuel costs feed into transport and logistics, with broader se food, manufacturing, and services. April fuel price increases, which the government tried to mitigate by temporarily reducing the fuel levy, will begin to prints. Figure 1: SA inflation, YoY % change

Source: Stats SA, Anchor Capital

March inflation was primarily driven by housing and utilities (+5.1% YoY, contributing 1.2 ppts to the 3.1% total rise), food and non-alcoholic ANCHOR  beverage ppts), and insurance and financial services (+4.6% YoY, +0.5 ppts). NAB inflation rose primarily because of high meat prices (+11.6% YoY but easing f print), reflecting ongoing supply constraints due to the impact of the foot-and-mouth disease outbreak.

Fruits and nuts remained in deflationary territo also included the annual fee adjustments in education services, with primary and secondary education services rising by 6.2% YoY and tertiary by 4.2 across all education levels rose by 5.4% YoY. From a policy perspective, the outlook has shifted. At its 26 March meeting, the SARB’s Monetary Policy Committee (MPC) held the repo rate at 6.75% stance amid rising uncertainty.

The easing cycle has effectively paused, with risks now tilted to a delay in rate cuts and, in more extreme scenarios, po also revised its headline inflation forecast for 2026 upward to 3.7% from January’s 3.3%. Our base case is that the interest rate remains on hold in the near term.

The path forward will depend largely on the oil price trajectory and the persiste sustained period of elevated energy costs would place upward pressure on inflation and delay policy easing; conversely, a de-escalation could reopen SA enters this period in a relatively stronger position than in previous shocks, with improved fiscal dynamics and a more stable macro framework. No not the initial oil price spike but its duration and the extent of second-round effects.

In short, March’s inflation print reflects contained, largely domestic energy market stress … yet.