Bjorn Seifritz - Financial Advisor

10/06/2026

Great surprise for South Africa.

Finance
Luke Fraser
9 Jun 2026

South Africa’s economy grew by 0.5% in the first three months of 2026, despite the turbulent end to the quarter, comfortably beating market expectations.

The latest figure beat the 0.3% median estimate of 15 economists in a Bloomberg survey.

Stats SA noted that the conflict in the Middle East began towards the end of February, more than halfway through the first quarter.

The impact of the conflict was felt in the sharp fuel price increases in April, which may be reflected in the second-quarter GDP estimates.

Stats SA said that finance, agriculture, trade and transport did the heavy lifting on the production (supply) side of the economy.

The expenditure (demand) side was supported by declines in imports and by rises in household consumption, government consumption, and exports.

Nine industries were stronger overall, with the finance industry the main positive contributor to production, expanding 0.9% and adding 0.2 of a percentage point to GDP growth.

Agriculture, trade, and transport & communication also made notable contributions, expanding by 3.9%. Field crops and horticulture products, mainly fruit, underpinned the industry’s stronger performance.

The trade industry also extended its gains for a sixth consecutive quarter, supported by stronger wholesale trade, motor trade, food & beverages and accommodation.

While transport and mining were up, manufacturing misfired over the quarter, weakening by 0.8% – the second straight decline, with a drag including petroleum & chemicals, iron & steel, and wood, paper & publishing divisions.

While glass & non-metallic mineral products, motor vehicles & transport equipment, electrical machinery and textiles & clothing were stronger, it was not enough to lift manufacturing into positive territory.

Expenditure side
Stats SA said that the expenditure side of the economy was lifted by weaker imports, as well as a rise in household consumption, government consumption and exports.

Household consumption rose by a marginal 0.1%, the lowest growth rate in eight quarters. Household utilities, such as water and electricity, and transport were the largest positive contributors.

Consumers spent less on food & non-alcoholic beverages and on alcoholic beverages, to***co & narcotics, consistent with 0% growth in retail sales on the production side of the economy.

Spending on restaurants & hotels was also down. The miscellaneous goods & services category was the most significant negative contributor, reflecting a decline in insurance expenditure.

Stats SA added the slowdown in imports was driven by weaker trade in precious metals, mineral products, machinery & electrical equipment, textiles & textile articles, and animal & vegetable fats and oils.

Exports rose by 0.5%, driven by increases in trade in mineral products, vegetable products, prepared foodstuffs, beverages & to***co.

The manufacturing, trade and mining industries thus drew into their stockpiles to meet demand, resulting in an annualised R22.4 billion drawdown in inventories.

09/06/2026

Magda Wierzycka’s message to South Africa about the United States.

Sygnia CEO Magda Wierzycka says the world has lived through unprecedented times over the last six months, with the global order changing from the US’s attacks on Iran.

Speaking in the group’s interim results for the six months ended 31 March 2026, Wierzycka said that many investors and politicians paid attention to the Strait of Hormuz before the US’s attacks on Iran.

“They certainly did not recognise the role it played in the global oil supply chain and, hence, in global energy markets,” she said.

“The lack of a clear resolution and the prolonged nature of the conflict have led to higher inflation and a
lower likelihood of interest rate cuts across all global economies, and the impact on consumer spending has been profound.”

She warned that this form of disruption normally leads to social unrest and growing dissatisfaction with political regimes.

The second theme of the year was the rise of AI, especially in relation to valuations across markets ahead of potential listings.

The CEO said that large language models have progressed from basic text into software development and image generation.

With the progress made in just a few years, the CEO said that the pace of innovation is unprecedented.

“As much as AI enhances productivity, however, it is also expected to cause massive job displacement, erode data privacy and increase vulnerability to cybercrime, among other issues,” she said.

The fear among investors of missing out on the buying frenzy has led to skyrocketing valuations for companies such as OpenAI, Anthropic, and SpaceX.

She said that Anthropic’s value increased from approximately $18 billion in March 2025 to approximately $965 billion in May 2026.

OpenAI’s valuation rose from approximately $157 billion to approximately $840 billion over the same period. SpaceX is now looking to go public in a deal valued at $1.75 trillion.

She added that ChatGPT sees itself evolving beyond conversation and becoming deeply integrated into the systems people use every day, from research to healthcare, fundamentally changing the global economy.

Wierzycka said that South Africans have only one answer: “Unlearn, relearn, adapt and adopt”.

“Against that backdrop, from initially being a target of US wrath, South Africa has become an observer. Perhaps that is the best place for us to be,” she added.

08/06/2026

South African households have a R2.4 trillion problem.

Finance
Caitlyn Hilliard-Lomas
7 Jun 2026

South Africa’s household debt burden has reached an alarming R2.4 trillion, and according to experts, its impact extends beyond bank statements and credit records.

National Debt Advisors said this burden is now evident in the physical and mental health of individuals, manifesting as sleepless nights, anxiety, panic, shame, and the stress of living under constant pressure from creditors.

National Debt Advisors Head Sebastien Alexanderson said that South Africa is misdiagnosing the crisis.

Financial distress, he said, appears as a financial issue, is experienced as a health concern, and is often misclassified as a mental health matter in isolation.

“The medication is treating the output. Nobody is treating the input. And the input is a credit environment that has put their entire nervous system on high alert, sometimes for years,” Alexanderson said.

According to the National Credit Regulator, 4.9 million consumers have impaired credit records, indicating poor credit histories.

Additionally, 6.3 million are in early-stage arrears. Household debt is currently at R2.4 trillion.

An impaired credit record indicates that your financial history contains missed payments, defaults, or judgments.

This negatively impacts your credit score, making it more difficult or costly to obtain loans or credit cards.

To rebuild your credit, Standard Bank recommends checking your credit report, paying off any overdue debts, and avoiding new debt.

Alexanderson said that the most significant damage is not represented in any official records.

“Nobody counts the panic attacks. Nobody counts the marriages that ended because of the financial stress. Nobody counts the children who grew up watching their parents flinch every time the phone rang,” he said.

For many households, debt is no longer just a financial issue; it has turned into a daily psychological struggle.

Individuals often experience insomnia, chest tightness, avoidance behaviours, irritability, shame, secrecy, and dread as the month-end approaches.

Financial debt leads to physical stress

Research from the University of Pretoria’s psychology department has shown that when creditor pressure is alleviated, there are measurable improvements in anxiety and depressive symptoms among those who are over-indebted.

This finding aligns with the experiences of debt counsellors, who regularly witness similar changes.

An existing legal framework addresses this problem. Under Section 86 of the National Credit Act, once a consumer submits a debt review application, credit providers are legally obligated to stop enforcement actions and direct contact.

Alexanderson stated that those most in need of protection are often the least likely to be aware of its existence.

“In 15 years of debt counselling, I have never met a client whose anxiety disappeared while the collection calls were still coming. You cannot heal in a warzone,” he said.

Alexanderson said that when patients experience anxiety, insomnia, or stress-related symptoms, debt may not simply be incidental; it could actually be the root cause.

In many instances, he said the issue requires legal intervention. “Debt is not a moral failure. It is a circumstance,” he said.

Below is a list of points for South Africans who feel that financial stress is impacting their physical or psychological well-being.

View symptoms as data, not flaws: Waking up at 03h00, experiencing chest pain before the end of the month, and avoiding phone calls are responses to stress, not signs of weakness.
Communicate fully with your GP: If you are being treated for anxiety or insomnia, inform your doctor that financial stress is a primary cause of your symptoms.
Know your rights as a debtor: Creditors cannot legally call you at unreasonable hours, contact your employer, or use coercive language, all of which are prohibited under the National Credit Act (NCA).
Understand Section 86: Filing a debt review application will legally stop enforcement actions and direct contact from debt collectors immediately.
Don’t keep secrets: Concealing the extent of your debt from your spouse is a significant predictor of marital breakdown, according to the cases handled by Alexanderson

05/06/2026

South Africa’s financial outlook is strengthening on the back of strict fiscal discipline, though municipal crises and digital fraud present immediate headwinds.

Economic headlines are dominated by the government's refusal to bail out failing state structures without reforms, alongside a landmark high court victory targeting illegal cryptocurrency outflows.

National Fiscal Outlook & Policy Shift

Investor Sentiment Rises: Global ratings agencies like Moody’s and S&P Global Ratings have maintained a positive outlook for South Africa.

Fiscal gains are being supported by stronger-than-forecast budget closures and the upcoming introduction of a formal binding fiscal rule.

State Bank Plans Dismissed: Finance Minister Enoch Godongwana officially ruled out the creation of a new state-owned commercial bank. He confirmed that the state does not have the financial resources to inject capital into a new venture.

Rand and Bond Inflows: The South African Rand has pivoted sharply, turning from a carry trade loser into a winner as global bond inflows surge into local markets.

Regional Crises & Market Disruptions

Joburg Financial Crisis: Business leadership groups have issued an urgent warning to the Presidency regarding the City of Johannesburg's collapse. The metro faces an estimated R12 billion annual drain due to unauthorised expenditure and corruption, directly risking the national economic recovery.

Digital Fraud Spike: New data released by TransUnion highlights a major surge in digital banking fraud, which has collectively cost South African consumers over R2 billion.

Corporate and Job Cuts: Platinum Group Metals (PGM) operations continue to bleed jobs amid persistent inflationary pressures. Valterra announced an additional 497 retrenchments this week.

Crypto and Exchange Control Crackdown

SARB Asset Seizure Rights: The Johannesburg High Court issued a major ruling against an individual attempting to move R158 million out of the country. The judgment explicitly confirms that the South African Reserve Bank (SARB) has the full legal authority to forfeit and seize cryptocurrency used to bypass domestic exchange controls.

Moving digital assets to offshore wallets without explicit approval is now firmly classified as illegal capital flight.

Consumer Finance and Costs

Aviation Relief: FlySafair has cut its ticket pricing surcharge. The move follows a stabilizing drop in global jet fuel costs, offering immediate relief to local business and leisure travelers.

Banking Fees: Corporate changes are looming for everyday consumers as First National Bank (FNB) readies its new transactional fee structures, set to go live next month.

04/06/2026

AI, Regulation, and the Future of Advice.

Partner
3 Jun 2026

If there’s one truth that defines the current moment in financial advice, it’s this: the pace of change has become impossible to ignore.

Artificial intelligence is evolving not year by year, but day by day.

As Michael Mulder noted in the latest Digital Lowdown session, content prepared one week can already feel dated by the next morning.

The question for advisers is no longer whether AI will affect their practice; it’s how to engage with it deliberately, and on your own terms.

Know your landscape before you leap
The AI market is currently dominated by a handful of major players: Google with Gemini, Anthropic with Claude, and OpenAI with ChatGPT.

Microsoft, often cited alongside them, doesn’t build its own model; rather, it integrates others, having used OpenAI’s models historically and more recently incorporating Claude into its Copilot offering.

For advisers evaluating where to start, this matters.

Your choice of AI tool isn’t just about features, it’s about where your data sits, how it integrates with your existing tech stack, and what security assurances come with each platform.

Most tools offer monthly subscriptions at accessible price points, allowing you to trial and cancel without a long-term commitment.

The practical advice: start small. A $20-a-month subscription to one of the leading models is a low-stakes way to develop familiarity. The value is in the learning.

‍”Before jumping into these tools, always make sure your data is clear, clean and secure”. ~ Mike Mulder.

Start with your gaps, not the technology
One of the session’s most important themes was the danger of letting technology drive the agenda.

The better approach is to ask: what problem am I trying to solve? What are the gaps in how my business operates today?

You don’t need to overhaul your entire practice overnight because of the rise of AI or new legislation.

Instead, identify specific pain points, a repetitive onboarding task, a compliance documentation burden, a client communication that takes too long to produce, and explore whether an AI tool can meaningfully help with that specific thing.

AI agents can be configured to operate within precise guardrails, drawing only on the information you give them, sticking to specific topics, and referencing approved sources only when internal options are exhausted.

Building these agents is now genuinely accessible to non-technical users.

The prompting and configuration work replaces what used to require a developer, and the results can be tailored closely to how your business actually works.

Governance, compliance and the bigger picture
South Africa is not standing still on AI regulation.

A formal AI road map is now before parliament, spanning education, trade, public administration, healthcare, and financial services.

Most forward-looking firms are already establishing governance frameworks, securing enterprise licences, and integrating AI within controlled environments.

On the regulatory compliance side, advances in AI are already beginning to simplify some of the more demanding reporting requirements, including SARS integrations.

AI’s ability to absorb and adapt to those changes quickly stands to meaningfully improve data quality during tax reporting season, and strengthen the accuracy of what flows through to SARS certificates.

The adviser community has a role to play in supporting and engaging with that evolution, not just reacting to it.

The platform beneath the practice
Amid all this change, one thing remains constant: the importance of a strong operational foundation.

Delivering consistent, high-quality advice requires clarity, confidence, and the right support structures.

That’s precisely where a future-fit investment platform becomes essential.

The INN8 Investment Platform was designed with this in mind.

Purpose-built and adviser-inspired, it brings together investment administration, product access, and optimisation in a digital-first environment that mirrors how advisers actually work.

No legacy complexity. No unnecessary friction. Just the infrastructure to deliver advice with consistency and confidence, leaving more time for what matters most: your clients.

Click here to learn more about INN8.

And there’s one more thing worth watching closely
Running alongside the AI revolution is what may be South Africa’s most significant regulatory overhaul in two decades, the COFI Bill, which will reshape how every FSP-licensed practice operates, gets paid, and is held accountable.

The work you do today on your technology and processes is the same work that prepares you for what COFI will require. These aren’t two separate conversations. They’re one.

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03/06/2026

South Africans set to pay the highest petrol price in history.

Energy
Malcolm Libera
2 Jun 2026

South African motorists are set to pay the highest petrol price in the country’s history from Wednesday, 3 June 2026.

This is despite a recovery in fuel price fundamentals that would ordinarily have resulted in lower prices at the pumps.

The Department of Mineral and Petroleum Resources has published the official fuel price adjustments for June. It confirmed that inland 95 unleaded petrol will increase by R1.43 per litre to a record R28.06 per litre.

The new price surpasses the previous record of R26.74 per litre reached in July 2022, when global oil markets were shaken by Russia’s invasion of Ukraine.

The latest increase comes after two months of extreme volatility in global oil markets. South Africa’s fuel prices have surged this year due to escalating geopolitical tensions in the Middle East, particularly the conflict involving the United States and Iran.

According to the Department of Mineral and Petroleum Resources, the worsening crisis and the effective closure of the Strait of Hormuz disrupted around 20% of global oil supplies.

As a result, Brent crude oil climbed from $93.67 per barrel to a peak of $138 per barrel in April, keeping international fuel product prices elevated throughout May.

Although oil prices stabilised above $100 per barrel for most of May and eventually eased below that level towards the month-end amid hopes of a US-Iran truce, the decline came too late to significantly improve South Africa’s fuel price recoveries.

Additionally, the rand remained relatively resilient, trading between R16.30 and R16.65 to the US dollar, helping to limit some of the pressure from higher oil prices.

Under normal circumstances, the improved recoveries and stable currency would have translated into lower fuel prices.

However, the National Treasury’s decision to partially reverse fuel levy relief introduced earlier this year ultimately pushed petrol prices higher.

To shield motorists from soaring fuel costs in April and May, Finance Minister Enoch Godongwana cut the General Fuel Levy by R3.00 per litre for petrol and R3.93 per litre for diesel.

From June, Treasury is reinstating half of that relief, adding R1.50 per litre back to petrol prices. In addition, the Slate Levy was increased to R1.58 per litre to help recover a R14.2 billion industry deficit.

The combined effect of these tax and levy adjustments outweighed the benefits of lower international fuel prices, resulting in the record petrol price.

2026 has been a year of pain so far
Diesel users, however, will receive some relief. Despite R1.96 per litre being added back through the fuel levy adjustment, diesel prices will still decline by between R2.62 and R3.25 per litre. Inland diesel 0.005% wholesale will fall to R29.26 per litre.

The reduction follows record diesel prices in May, when inland diesel 0.005% wholesale reached as high as R31.88 per litre.

Even with the June decrease, fuel prices remain substantially higher than at the start of the year.

Petrol has increased by R7.31 per litre between January and June, while diesel, which had risen by as much as R13.36 per litre during the year, will still be R10.74 per litre higher than January levels after the latest adjustment.

While many motorists may assume higher fuel prices benefit filling station operators, this is not the case.

“The South African Petroleum Retailers Association (SAPRA) welcomes the latest fuel price adjustments, particularly the decline in diesel prices, which should bring some relief to parts of the economy,” SAPRA said.

“However, SAPRA notes with concern that the increase in petrol prices will add further pressure on consumers already facing strained household budgets.”

SAPRA added that lower diesel, illuminating paraffin, and LPG prices could ease costs for transport-dependent sectors, farmers, small businesses and households.

However, SAPRA National Chair Henry van der Merwe stressed that retailers do not benefit directly from higher pump prices.

“Petroleum retail margins in South Africa are regulated and fixed, meaning retailers do not benefit directly from price increases, even as operating and financing costs remain elevated,” he said.

“Any easing in fuel-related costs is important for consumers, businesses and the wider economy. The decline in diesel, paraffin and LPG will be welcomed by many South Africans, even as petrol remains under pressure,” van der Merwe said.

“For retailers, however, the underlying operating environment is still challenging, which is why longer-term sustainability in the sector remains important.”

02/06/2026

Money pumping back into South Africa.

Finance
Luke Fraser
31 May 2026

JSE CEO Valdene Reddy says more money is being reinvested in South Africa, with the local equity market among the best performers globally.

South Africa’s equity market has seen strong growth since the 2024 National Elections. While most of the rise came from local investors, there has been increased investment from foreign investors.

Non-resident equity ownership on the JSE increased from 29.3% at the start of 2025 to 32.9% at the end.

Fixed income also remained attractive for foreign investors in 2025, with net foreign inflows into South African bonds standing at R122 billion.

While global markets have been heavily impacted by the war in Iran, Reddy said South Africa still offers strong appeal to investors.

Speaking in the latest PSG Think Big webinar, Reddy said that the JSE’s record R1 billion in profit for 2025 reflects a broader shift in perception, with renewed investor interest in South African assets.

“The appeal factor for South Africa has never been stronger, and it’s not just a regional play. At the moment, we are representing a credible investment profile as a country,” said Reddy.

On top of the formation of the GNU, Reddy said that the greater investor interest comes amid stronger public-private sector collaboration.

“We’ve seen systematic building of returns, with South Africa being one of the best performing markets globally for over 24 months,” said Reddy.

However, she cautioned that sustaining this momentum will require consistent delivery.

“The narrative has to be deliberate and sustained; we have to follow through with ex*****on to actually have that high conviction investor sentiment shift to South Africa.”

On top of the improved sentiment, investors are shifting their behaviour, with a greater focus on global diversification.

“There’s a fundamental shift, where people are reinvesting back into South Africa,” Reddy said, pointing to a more balanced approach to global diversification without capital leaving the country.

Big changes for the JSE

The JSE itself is undergoing huge shifts, with greater focus on modernising technology and attracting a broader base of participants.

“We want to stay at the forefront of that so we can attract new investors,” she said, referencing including digital assets, retail investing platforms and changing capital-raising mechanisms.

Amid concerns over declining listings and subdued IPO activity in recent years, the CEO said that the pipeline for further developments is looking much stronger and of higher quality.

“There are alternative forms of capital raise,” she added. “We want to represent not just listings, but capital raising solutions for the ecosystem.”

The bourse also wants to balance ease of access for listings with strong governance, as well as investor confidence and protection.

The broader South African economy, however, remains a concern for the country. The nation is expected to see around 1%, but really needs to see over 5% to achieve its goals.

That said, the CEO is encouraged by the increased collaboration between the public and private sectors. “We feel we are actually pushing against an open door at this point in time,” she said.

There is growing recognition among government officials of the crucial role that capital markets play in driving economic growth.

01/06/2026

The critical financial update for South Africa this week centers on the South African Reserve Bank (SARB) hiking the repo rate by 25 basis points to 7%, triggering immediate cost pressures for consumers alongside an affirmation of South Africa’s sovereign credit rating by S&P Global.

1. Act on Monetary Policy & Inflation Shocks

Repo Rate Hiked: The SARB raised the main repo rate to 7%, its first increase since 2023, to combat rising risk profiles stemming from Middle East supply shocks and a weaker global backdrop.

Inflation Outlook Raised: The central bank increased its inflation forecast for 2026 to 4.4% (up from 3.7%) after local headline inflation climbed to 4%.

Bond Impact: Monthly bond repayments will spike immediately, pressuring an already constrained consumer base and the local agricultural sector.

2. Monitor Corporate & Market MovementsS&P Rating Affirmation: S&P Global Ratings maintained South Africa's rating at "BB" (Foreign Currency) and "BB+" (Local Currency) with a Positive Outlook. The agency cited steady fiscal management and structural reforms via Operation Vulindlela.

Growth Downgrade: Reflecting the macro headwinds, the SARB trimmed its 2026 domestic GDP growth projection down to 1.2%.

Retail Distress: The Spar Group shares plummeted on warnings that interim earnings could dive by up to 65%. Meanwhile, global luxury giant Richemont edged closer to an unprecedented R2-trillion market valuation.

3. Track Energy, Logistics & Infrastructure Costs

Mixed Fuel Adjustments: The National Treasury reintroduced 50% of the general fuel levy. Because of this, petrol (93 and 95) is hit with an increase of roughly R1.04 to R1.08 per litre, while diesel users absorb the tax to still see a price cut of roughly R2.96 to R3.60 per litre.

Eskom & Municipal Debt Crisis: Business Leadership South Africa (BLSA) raised severe warning flags over Johannesburg's staggering R5.2 billion debt to Eskom, prompting National Treasury intervention over municipal financial mismanagement.

On the corporate side, Eskom appointed telecom alumnus Junaid Munshi to head its Distribution division.

4. Note Regulatory & Compliance Transitions

SARS Border Update: The South African Revenue Service rolled out a modernized customs mandate. All foreign-registered vehicles must now be logged on the online Traveller Management System (TMS) prior to border arrival.

29/05/2026

The South African benchmark repo rate is 7.00%, and the commercial prime lending rate is 10.50%.

These current figures follow a 25-basis-point interest rate increase announced by the South African Reserve Bank (SARB) Monetary Policy Committee (MPC).

Key Official Rates

Repo Rate: 7.00% (The rate at which the central bank lends money to commercial banks).

Prime Lending Rate: 10.50% (The base rate at which commercial banks lend to consumers).

Why Interest Rates Were Increased

The central bank shifted away from its previous rate-cutting cycle due to mounting global and local economic pressures:

Geopolitical Conflict: The ongoing war in the Middle East and the closure of the Strait of Hormuz severely disrupted global energy markets.

Fuel Price Surge: Fuel prices jumped 11% in April, driving up overall consumer logistics and production costs.

Rising Inflation: South Africa's headline consumer inflation accelerated sharply to 4.0%, hitting the upper edge of the SARB's newly targeted 3% inflation focal point.

Weather Risks: The central bank highlighted that emerging El Niño climate patterns present further upside risks to food prices and agricultural yields.

Household Impact Breakdown

The increase affects variable-rate credit agreements, retail accounts, and vehicle finance immediately.

For a clearer picture of how this adjustment shapes monthly bond repayments, evaluate the approximate changes across common home loan brackets:

Future Economic Outlook

The central bank's Quarterly Projection Model signals a tighter monetary environment for the immediate future.

The SARB revised its annual inflation projection up to 4.4% for the year, while downgrading South Africa's real GDP economic growth forecast to 2.6%. Governor Lesetja Kganyago cautioned that if supply-side shocks worsen or inflation tests the 6% boundary, the country could potentially face up to three additional interest rate hikes.

28/05/2026

Biggest financial blow to South Africans in two years

Wealth
Caitlyn Hilliard-Lomas
27 May 2026

South African salary earners faced immense challenges in April, resulting in average salaries dropping to R20,244 – the lowest level in two years.

These issues include slowing profit growth, rising inflation, and economic uncertainty – r

This is according to the latest PayInc Net Salary Index, which monitors the average nominal net salaries of around 2.1 million employees in the country.

“The average nominal net salary declined to R21,228 in April 2026. This represents a 0.6% decrease from March, and a 0.5% decline compared to April 2025,” said PayInc Head of Stakeholder Engagement Shergeran Naidoo.

According to PayInc, this decline shows a significant change after two years of strong salary growth in 2024 and 2025, during which earnings generally kept up with inflation.

Economists have noted that the significant decline in the economic outlook due to the outbreak of the war in the Middle East is starting to impact the labour market.

Companies are experiencing increased uncertainty regarding profitability, costs, and planning, which is beginning to exert pressure on earnings growth and job prospects.

With inflation on the rise and nominal salary growth slowing, real salaries have experienced a further decline.

The PayInc Net Salary Index, adjusted for inflation, fell by 1.2% from the previous month and by 2.7% compared to April 2025.

This decline has brought real salaries down to R20,244, marking the lowest level recorded in two years.

The deteriorating outlook for inflation has been largely driven by sharp increases in fuel prices in April and May.

This trend has overturned earlier expectations for a more favourable inflation situation at the beginning of 2026.

In April, South Africa’s headline inflation rate rose to 4.0%, the highest level since August 2024. Forecasts indicate that inflation in May could rise further to approximately 4.6%.

Economists said that the combination of slowing salary growth and rising inflation is creating a difficult environment for salary earners.

Households are facing pressure from several areas simultaneously, including higher fuel prices, increasing living costs, and the potential for rising interest rates.

PayInc said that the South African Reserve Bank’s Monetary Policy Committee (MPC) is likely to adopt a cautious stance as inflation risks grow.

With inflation forecasts for 2026 and 2027 projected to exceed the SARB’s newly established target of 3%, the likelihood of an interest rate hike announcement later this week has increased.

A bleak outlook

In April 2026, economist Elize Kruger stated in an interview with Kaya Biz that she expects the average headline Consumer Price Index (CPI) to rise to approximately 4.2% for the year, with potential for even higher short-term spikes.

This raises the possibility of tighter monetary policy. “It will really depend on how long the war lasts,” she explained.

However, she also noted that the South African Reserve Bank will be focused on second-round effects, which include wage pressures and increasing operating costs.

“There’s a chance that we will see a reaction on interest rates as a result of this war,” Kruger stressed the scale of the storm facing the economy.

She said it is a significant economic shock, and estimated that fuel prices could rise cumulatively by “about R7.20 per litre” for petrol and “almost R14 per litre” for diesel over a three-month period.

“There’s no way anybody can absorb this increase and not give it through to the end user.” She warned that this outcome will place additional pressure on both households and businesses.

“This effectively is just going to extend our cost of living crisis in South Africa,” Kruger said, adding that if interest rates rise in response, it will just add to that cost.

While resolving the conflict could relieve some pressure, Kruger warned that the damage might persist.

Even in a more optimistic scenario, Kruger stated that it won’t be easy to fully reverse what has already occurred.