The Central Bank of Eswatini published updated inflation projections for 2025-2027, revising its short-term outlook down and projecting annual average inflation of 3.66% in 2025, 4.05% in 2026 and 3.92% in 2027. It revised the 2026 forecast down to 4.05% from 4.58% and the 2027 forecast to 3.92% from 4.34%. Drivers cited include sustained moderation in food and housing and utilities prices, which together carry a 47.8% weight in the consumer price index basket; headline inflation in April 2025 printed at 3.3%, while core inflation (excluding volatile items such as food, auto-fuel and energy) was 3.4%, both below the Bank’s forecast. The Bank expects a continued slowdown in oil prices and a downward review of multi-year electricity tariffs to weigh on inflation, partly offset by a weaker rand/lilangeni exchange rate that fell to SZL 18.91 per USD in April 2025 from SZL 18.50 at the previous meeting amid policy developments in South Africa and a 30% tariff on South African exports to the US. Quarterly average inflation is projected at 3.94% in Q1 2025, 3.31% in Q2, 3.85% in Q3 and 3.56% in Q4, and at 3.53% in Q1 2026, 4.18% in Q2, 4.20% in Q3 and 4.27% in Q4.
Central Bank of Eswatini 2025-03-01
Central Bank of Eswatini revises inflation projections lower, forecasting 3.66% in 2025 and 3.92% in 2027
The Central Bank of Eswatini revised its inflation projections for 2025-2027, lowering the 2026 forecast to 4.05% from 4.58% and the 2027 forecast to 3.92% from 4.34%. Key drivers include moderated food and housing prices, with inflation in April 2025 at 3.3% and core inflation at 3.4%, both below expectations. The Bank anticipates continued pressure from a weaker rand/lilangeni exchange rate and policy changes in South Africa.