South Africa’s Consumer Price Index (CPI) for November 2025, released on November 19, registered a 0.10% month-on-month (MoM) increase, down from October’s 0.30% rise. This print, sourced from the Sigmanomics database, marks a continued moderation from the volatile inflation environment seen earlier this year. The year-on-year (YoY) inflation rate, while still elevated, has softened from peaks above 3.20% recorded in March 2025.

Drivers this month

• Energy prices contributed 0.04 percentage points (pp), reflecting ongoing global oil price volatility.
• Food inflation eased slightly, adding 0.02 pp, supported by improved domestic harvests.
• Shelter and transport costs remained steady, contributing 0.03 pp combined.
• Core inflation components excluding volatile items held firm, indicating persistent underlying price pressures.

Policy pulse

The 0.10% MoM CPI increase keeps inflation within the South African Reserve Bank’s (SARB) target band of 3-6% YoY, though near the upper bound. This suggests a cautious stance for monetary policy, with the SARB likely to maintain current interest rates while monitoring inflation drivers closely.

Market lens

Immediate reaction: The South African rand (ZAR) appreciated modestly by 0.30% against the US dollar in the first hour post-release, reflecting market relief at the softer inflation print. Short-term government bond yields (2-year) declined by 5 basis points, signaling reduced inflation risk premiums.

The November CPI reading fits into a broader macroeconomic context where South Africa’s growth remains subdued, and inflation dynamics are influenced by both domestic and external factors. The Sigmanomics database shows that inflation averaged 2.70% YoY over the past 12 months, with notable volatility earlier in 2025 due to supply chain disruptions and commodity price swings.

Monetary Policy & Financial Conditions

The SARB’s repo rate has been steady at 7.00% since mid-2025, balancing inflation containment with growth support. Financial conditions remain moderately tight, with credit growth slowing to 4.10% YoY in October, reflecting cautious lending amid global uncertainties.

Fiscal Policy & Government Budget

Fiscal consolidation efforts continue, with the 2025/26 budget targeting a deficit reduction to 4.50% of GDP. However, rising debt service costs and social spending pressures pose risks to fiscal sustainability, potentially limiting counter-cyclical policy space.

External Shocks & Geopolitical Risks

Global commodity price fluctuations, especially in oil and metals, remain key inflation drivers. Geopolitical tensions in Eastern Europe and East Asia add uncertainty to trade and investment flows, impacting South Africa’s export revenues and import costs.

What This Chart Tells Us: The CPI trend is reversing the two-month acceleration seen in August and September, signaling a tentative easing of inflation pressures. However, core inflation’s resilience suggests underlying cost-push factors remain active, requiring close monitoring.

Market lens

Immediate reaction: South African government bond yields softened post-release, with the 2-year yield dropping 5 basis points. The rand strengthened modestly, reflecting market confidence in the inflation outlook. Breakeven inflation rates edged lower, indicating tempered inflation expectations.

Looking ahead, South Africa’s inflation trajectory will hinge on several key factors. The base case scenario (60% probability) envisions inflation stabilizing around 3.00-3.50% YoY through mid-2026, supported by moderate commodity prices and stable monetary policy.

Bullish scenario (20%)

• Global commodity prices decline sharply, easing import costs.
• Stronger fiscal consolidation improves investor confidence.
• Monetary policy remains accommodative, supporting growth without inflation spikes.

Bearish scenario (20%)

• Renewed geopolitical tensions disrupt supply chains, pushing energy and food prices higher.
• Fiscal slippage leads to currency depreciation and imported inflation.
• Core inflation accelerates due to wage pressures and structural bottlenecks.

Monetary policy will likely remain data-dependent, with the SARB ready to adjust rates if inflation deviates significantly from the target band. Fiscal prudence and external risk management will be critical to maintaining macroeconomic stability.

South Africa’s November 2025 CPI print confirms a moderating inflation environment but highlights persistent structural challenges. The interplay of domestic fiscal discipline, monetary policy calibration, and external shocks will shape the inflation outlook. Financial markets have responded positively to the softer print, yet vigilance remains essential amid geopolitical uncertainties and supply-side risks.

Long-run trends such as urbanization, labor market dynamics, and energy transition will continue to influence inflation’s trajectory. Policymakers must balance growth support with inflation control to sustain economic resilience.

Key Markets Likely to React to CPI

The South African CPI release typically influences several key markets, including currency, bonds, and equities. The following symbols have historically shown sensitivity to inflation data:

• ZARUSD – The South African rand’s USD exchange rate reacts swiftly to inflation surprises, reflecting currency risk sentiment.
• JSE – The Johannesburg Stock Exchange index often adjusts to inflation outlook changes, impacting equity valuations.
• SAB – South African Breweries, sensitive to consumer spending and input costs, tracks inflation trends closely.
• BTCUSD – Bitcoin sometimes acts as an inflation hedge, with price movements correlating to inflation expectations.
• EURZAR – The euro to rand pair reflects broader risk appetite and inflation differentials between Europe and South Africa.

Extras: CPI vs. ZARUSD Since 2020

Since 2020, South Africa’s CPI and the ZARUSD exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with ZAR depreciation due to concerns over purchasing power and monetary tightening. For example, the inflation spike in early 2025 corresponded with a 7% depreciation in ZARUSD. Conversely, recent CPI moderation has supported a 3% appreciation in the rand. This dynamic underscores the currency’s sensitivity to inflation trends and SARB policy expectations.

FAQs

What does the November 2025 CPI reading indicate for South Africa’s economy?

The 0.10% MoM CPI increase suggests easing inflation pressures, supporting stable monetary policy and moderate economic growth.

How does the CPI affect monetary policy decisions in South Africa?

Inflation within the SARB’s target band reduces the likelihood of immediate rate hikes, but persistent core inflation keeps the door open for future adjustments.

Why is monitoring CPI important for investors?

CPI trends influence currency valuation, bond yields, and equity markets, guiding investment decisions and risk management strategies.

Takeaway: South Africa’s November 2025 CPI print signals a cautiously optimistic inflation outlook, balancing easing headline pressures with persistent core challenges amid a complex macroeconomic landscape.

Author: Sigmanomics Editorial Team

Updated 11/19/25

Sources

1. Sigmanomics database, South Africa CPI data, November 2025 release.
2. South African Reserve Bank Monetary Policy Review, November 2025.
3. National Treasury of South Africa, 2025/26 Budget Review.
4. International Energy Agency, Oil Market Report, November 2025.
5. World Bank Global Economic Prospects, October 2025.