In October 2024, South Africa's annual inflation rate fell to 2.8%, a decrease from 3.8% in September.

This decline is largely due to a significant drop in fuel prices, with government-regulated petrol and diesel prices falling by more than one rand per litre.

Elize Kruger, an economist, highlighted that changes in fuel and food prices significantly influenced the October figures, a month typically marked by lower survey responses.

The SARB is set to reveal its interest rate decision on November 21, 2024.

This drop in inflation creates a favorable environment for a potential interest rate cut by the SARB, which is expected to announce its decision soon.

Analyst Kruger suggested that a 25 basis points cut is the most likely outcome, given recent communications from the SARB and the depreciation of the rand.

A recent Reuters poll supports this expectation, indicating that the central bank is likely to reduce its repo rate by 25 basis points, matching the cut made in September, which was the first reduction in over four years.

Notably, this inflation rate is the lowest recorded since June 2020, during the height of the COVID-19 pandemic.

Economists had predicted a slowdown in inflation to 3.1%, which remains below the South African Reserve Bank's (SARB) target of 4.5% but within the acceptable range of 3%-6%.