Domestic inflationary pressures As described earlier, the exchange rate remains under pressure due to idiosyncratic domestic factors as well as the evolving global situation, thus exerting upward inflationary pressures. This limits the benefits of slowing global inflation to domestic inflation.
In fact, the SARB has revised its inflation projections upwards – headline inflation is now forecast to decelerate at a slower rate, averaging 6.0% in 2023 (5.4% previously) from 6.9% in 2022. This is, in the main, due to higher fuel and food price inflation – a direct consequence of a more depreciated exchange rate.