2026 seems to be off to a good start with inflation softening in January. While economists predict food inflation will ease over the year, the foot-and-mouth disease (FMD) outbreak could drive prices up significantly.
According to Statistics South Africa (Stats SA), Consumer Price Inflation (CPI) declined to 3.5% in January from 3.6% in December, returning to its November 2025 level. Data shows that stable food inflation and lower fuel prices contributed to the lower headline rate.
The monthly change in the CPI was 0.2%, the same as December’s reading.
This chart shows the trajectory of the inflation rate since 2009:
Food inflation may ease
Dr Elna Moolman, Standard Bank’s group head of South Africa macroeconomic research, said the results reflect benign inflationary pressures.
“Food inflation was 4.4% year-on-year, which may ease over the course of this year, supported by ample stocks and supply in many food types, both domestically and globally,” she said.
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According to Stats SA, the annual rate for cereal products slowed significantly in January, declining to 0.6% from 2.1% in December. White rice recorded a -11.0% change, marking the 11th consecutive month of deflation. Maize meal inflation declined notably from 9.5% in December to 2.6% in January.
The milk, other dairy products, and eggs category registered a 0.5% decline, higher than December’s -1.1%. Fresh full-cream milk (-1.4%), fresh low-fat milk (-1.6%) and eggs (-7.6%) contributed to the deflationary trend.
Stats SA found that the average price for a tray of six eggs was R22.90 in January, down from R24.51 in January 2025 and much lower than the peak of R25.85 recorded in December 2023.
FMD poses risk to meat prices
Moolman said the FMD poses a risk to meat prices, although there appears to be progress in procuring vaccines.
Stats SA found that rising meat prices continue to place pressure on South Africans’ wallets. The annual rate for meat accelerated to 13.5% from December’s 12.6%. “This is the highest print for the category since December 2017 (13.9%),” reads the data.
Three beef products recorded the highest annual rates of all 391 products in the CPI basket. These were beef steak (31.2%), stewing beef (30.3%) and beef mince (28.0%).
“More affordable beef products were not immune to sharper price increases, with the rate for beef offal accelerating to 17.2% from 10.5% in December. Pork also experienced a significant rise, climbing to 19.5% from 11.5%,” added Stats SA.
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Lower petrol price
Moolman and Stats SA noted that fuel prices helped contain inflation in January with a more than 3% decline.
“The index for fuel decreased by 3.7% in the 12 months to January,” said Stats SA.
“The monthly change for petrol was -3.1% and diesel -5.4%. The price of inland 95-octane petrol was R20.75 per litre in January, the lowest in almost four years, that is since February 2022 (R20.14).”
“Benign inflation should create scope for the Reserve Bank to cut interest rates further this year, which should provide some support to consumer spending,” said Moolman.
Banks increase annual fees
Stats SA noted that several banks increased their annual fees in January, resulting in an average rise of 4.1% in the financial services index compared with December. This contributed to the annual rate of 4.9%.
January also marks the beginning of the new school year. Stats SA has included school uniform items in the CPI basket since January 2025.
“These items recorded higher inflation rates than the average clothing and footwear print of 1.2%,” said Stats SA. “For example, prices for school jerseys rose by 7.0% compared with January 2025. School skirts or dresses increased by 3.2% and school shoes by 4.1% over the same period.
“Stationery items registered sharp monthly decreases in January, with pens 9.8%, writing books 5.0% and printing paper 3.5% cheaper than in December 2025. Textbooks decreased by a monthly 1.3%, taking the annual rate for textbooks to -3.3%.”
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