Economy

MBABANE – The Central Bank of Eswatini (CBE) has revised its short-term and medium-term inflation forecasts downward, citing lower food inflation, stronger currency assumptions and easing global oil prices.

Delivering the latest Monetary Policy Statement, Governor Dr Phil Mnisi revealed that the bank had revised the 2025 inflation forecast from 3.49 per cent announced in July to 3.24 per cent.

The medium-term forecast for 2026 was also revised downward to 3.78 per cent from 3.95 per cent. However, the forecast for 2027 remained unchanged at 3.71 per cent.

Dr Mnisi noted that the adjustments reflect a more favourable inflation outlook, especially as food prices and fuel costs continue to soften.

“The moderation in inflation is mainly supported by lower food prices, a stronger exchange rate assumption and stable global oil prices,” said Dr Mnisi.

According to the central bank, Eswatini’s headline consumer inflation eased to 2.6 per cent in August 2025 from 2.8 per cent in July. The moderation was largely due to falling food prices, with the food index declining to 1.4 per cent in August from 1.8 per cent in the previous month.

The transport index also remained in the deflationary zone, supported by stable fuel prices, while clothing and footwear, and household furniture and maintenance indices fell by a combined 2.5 percentage points during the same period.

However, price increases in the recreation and culture, restaurants and hotels, and miscellaneous goods and services categories slightly offset these declines.

Given the close economic ties between Eswatini and South Africa – its main trading partner – South Africa’s inflation trends provide important context for Eswatini’s economic outlook.

According to Statistics South Africa, annual consumer price inflation in South Africa eased to 3.3 per cent in August from 3.5 per cent in July, driven mainly by softer food and fuel prices.

The consumer price index (CPI) registered a monthly decline of 0.1 per cent between July and August, with four out of 13 inflation basket categories showing decreases.

Annual food inflation eased to 5.2 per cent in August from 5.7 per cent in July, supported by lower prices for cereals, seafood, dairy products, fruits, nuts and vegetables. Fuel prices also contributed to the moderation, with the annual rate for fuel recorded at -5.7 per cent in August compared to -5.5 per cent in July.

Full article available in our publication.

Annual inflation rates series from August 2019 to August 2025.