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• Create Date June 10, 2026
• Last Updated June 10, 2026

Inflation (CPI) and Interest Rate Outlook May 2026

The South African Reserve Bank (SARB) increased the repo rate by 25 basis points to 7.00% during its May 2026 Monetary Policy Committee meeting, citing rising inflation risks linked primarily to higher global oil prices and ongoing geopolitical tensions. Alongside the rate increase, SARB revised its inflation forecasts higher and lowered its economic growth expectations, reflecting a more challenging global environment.

For the construction industry, the key concern is the sharp increase in SARB's oil price assumptions, which could place upward pressure on fuel, transport and construction material costs over the coming months. However, the broader outlook remains relatively balanced. South Africa's economy continues to grow, inflation is expected to moderate over the medium term, and SARB's projections still point to gradually lower interest rates beyond 2026. While cost pressures have increased, the overall environment remains supportive of a gradual recovery in construction and infrastructure investment.

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