---
source: Bureau for Economic Research (BER)
url: https://www.ber.ac.za/Documents/Index/Inflation-Expectations
document_type: text (press release)
date_retrieved: 2026-03-16
period: Q1 2026 (first quarter 2026)
parent_publication: Inflation Expectations Survey
indicators_covered: [Inflation Expectations (One-year, Five-year), Professional groups, Households]
---

# Bureau for Economic Research — Inflation Expectations Survey, Q1 2026

**Release Date:** March 16, 2026 | **Release Time:** 09:00

---

## Executive Summary

In the first quarter of 2026 (the second survey after the inflation target changed to 3%), the average five-year inflation expectations of the three professional groups declined slightly to a **record low of 3.6%** (from 3.7% previously). Next-year expectations also declined marginally (0.1 percentage points) to **3.6%**. In contrast, household inflation expectations reversed its downward trend; one-year expectations were measured at **5.4%** (5.3% previously), while five-year expectations rose from 7.7% to **8.4%**.

---

## Key Findings

### Professional Groups (Analysts, Business, Labour)

The BER surveys three professional groups: financial analysts and economists, business people, and trade union representatives.

**Five-Year Ahead Inflation Expectations:**
| Metric | Q1 2026 | Q4 2025 | Change |
|--------|---------|---------|--------|
| Professional Average | 3.6% | 3.7% | -0.1 pp |
| **Assessment** | **Record Low** | Previous | **Declining** |

**One-Year Ahead Inflation Expectations:**
| Metric | Q1 2026 | Q4 2025 | Change |
|--------|---------|---------|--------|
| Professional Average | 3.6% | 3.8% | -0.2 pp |
| **Assessment** | **Lower** | Previous | **Declining** |

**Breakdown by Professional Group:**
- Financial analysts provided the **lowest forecasts**
- Business people provided mid-range forecasts
- Trade union representatives provided comparatively **higher forecasts**

### Household Inflation Expectations

Households showed a reversal of the downward trend observed in prior quarters, indicating concern about potential price pressures despite the professional consensus.

**One-Year Ahead Expectations:**
| Metric | Q1 2026 | Q4 2025 | Change |
|--------|---------|---------|--------|
| Household Average | 5.4% | 5.3% | +0.1 pp |
| **Assessment** | **Elevated** | Previous | **Rising** |

**Five-Year Ahead Expectations:**
| Metric | Q1 2026 | Q4 2025 | Change |
|--------|---------|---------|--------|
| Household Average | 8.4% | 7.7% | +0.7 pp |
| **Assessment** | **Elevated** | Previous | **Rising** |

---

## Survey Context

This survey represents the **second inflation expectations measurement** following South Africa's inflation target revision in November 2025, when the central bank lowered its target to **3%** with a tolerance band of **±1 percentage point**.

### Recent Economic Data

- **Current Inflation (January 2026):** 3.5% year-on-year
- **SARB Inflation Target:** 3% (revised November 2025)
- **Tolerance Band:** ±1%
- **Next SARB Interest Rate Decision:** March 26, 2026

---

## Interpretation and Monetary Policy Implications

### Professional Consensus

The **record low five-year inflation expectations at 3.6%** signal growing confidence among financial analysts, business leaders, and labour representatives in the South African Reserve Bank's inflation-fighting credibility. The decline from the previous quarter's 3.7% (and from even higher levels in prior periods) reflects expectations that inflation will converge toward the central bank's newly lowered 3% target.

**Factors Supporting Lower Expectations:**
- Stronger South African rand exchange rate
- Lower oil prices
- Central bank credibility improvements following target revision

### Household Divergence

The **divergence between professional expectations (3.6%) and household expectations (5.4%-8.4%)** reveals differing confidence levels:
- **Professionals** expect inflation close to the central bank's target
- **Households** expect inflation significantly above target, suggesting:
  - Concerns about food price inflation (particularly meat prices due to foot-and-mouth disease)
  - Uncertainty about electricity price increases
  - Skepticism about near-term price stability

This divergence is **typical in the early stages of inflation target credibility**, and historical data from New Zealand, the UK, Sweden, and Canada show that household expectations typically converge toward official targets over time as the central bank builds credibility.

---

## Survey Methodology

### Panel Structure

The BER surveys four distinct societal groups:

**Business Sector Panel:** 1,061 respondents, representative of all economic sectors:
- Manufacturing: 38.2%
- Retail trade: 22.7%
- Services: 19.8%
- Wholesale trade: 7.2%
- Agriculture & forestry: 6.2%
- Construction, Transport, Mining, Motor: 5.9%

**Financial Sector Panel:** 40 respondents
- Financial brokers & advisors: 65%
- Banks: 27.5%
- Insurance: 7.5%

**Labour Sector Panel:** 25 trade union and employer representatives

**Household Survey:** 2,500 area-stratified probability sample
- Coverage across all racial groups
- Metropolitan areas, cities, towns, and villages
- Stratification by income, education, and age

### Survey Administration

- **Frequency:** Quarterly
- **Method:** Mailed questionnaires; responses via post, fax, or internet
- **Timeline:** Questionnaires mailed three weeks before due date
- **Historical Context:** Survey includes 5-year average and most recent year inflation data to provide consistent benchmark

### Data Calculation

- **Aggregation Method:** Mean average of individual responses
- **Exclusions:** "Don't know" responses discarded; household responses exceeding 25% excluded
- **Coverage:** Questionnaire gathers expectations for CPI and CPIX inflation (current year + two years ahead) and includes supplementary questions on growth, exchange rate, wages, and (for financial sector) bond yields, M3 growth, and production capacity

---

## Forecast Indicators Gathered

Beyond headline inflation expectations, the survey also collects forecasts on:

- **Economic Growth:** Current year and following year
- **Prime Overdraft Rate:** Current year and following year
- **Rand/USD Exchange Rate:** Current year and following year
- **Wage and Salary Increases:** Current year and following year
- **Financial Sector (Additional):** R153 government bond yield, M3 money supply growth, manufacturing production capacity utilisation

These supplementary indicators provide context for understanding the drivers and supporting conditions of inflation expectations.

---

## Quality Assurance

The survey results satisfy basic statistical requirements and have been validated through independent checks. Historical data provided in the questionnaire helps establish consistency across respondents while allowing for informed deviations based on respondent judgment, reducing bias from extreme recent observations.

---

## Significance

The **record-low five-year professional inflation expectations at 3.6%**—combined with a one-year expectation at the same level—suggests that the market and business community anticipate a rapid convergence toward the central bank's 3% target. This contrasts markedly with household perceptions, which remain elevated at 5.4%-8.4%, reflecting a two-tier expectation landscape typical of the early credibility-building phase.

For monetary policy, these results indicate that professional expectations are increasingly anchored to the new target, reducing inflation inertia, though household expectations remain a consideration for future policy communications and actions.