A developing super El Niño weather phenomenon poses a threat to consumers.
South Africa's inflation outlook may improve in the coming months as easing oil prices filter through to lower fuel costs, but a developing super El Niño weather phenomenon poses a far greater threat to consumers and could push inflation into double digits next year.
This is according to Investec chief economist Annabel Bishop, who warned that significant risks remained for the inflation outlook beyond the immediate impact of fuel prices. "Upside risks persist for the inflation outlook in 2027, and in particular include a developing super El Nino weather phenomenon, which could push CPI inflation to double digits."
The MCB Group said that the expected 2026–2027 El Niño represents an additional layer of risk beyond the war in the Middle East rather than a standalone shock.
“By disrupting rainfall patterns, raising temperatures and affecting ocean productivity, it is likely to further destabilise agricultural output, intensify food price pressures and widen trade deficits, compounding existing macroeconomic vulnerabilities,” the financial services company said.
