A developing super El Niño weather phenomenon poses a threat to consumers.
South Africans could face higher food prices and fewer interest rate cuts next year after leading international weather agencies confirmed that El Niño conditions have developed, prompting Investec to raise its inflation forecast for 2027.
“With food prices the largest single contributor to inflation, we have lifted our 2027 CPI inflation forecasts to 3.7% year-on-year from 3.3% year-on-year previously, while there is likely to be some upwards support as well from agrichemical price pressures,” said Investec chief economist Annabel Bishop of next year’s forecast.
The warning of disrupted rainfall patterns and rising temperatures a builds on concerns raised earlier this month that a potential "super" El Niño could push food inflation into double digits if drought conditions severely affected South Africa's summer grain crop.
Bishop said a number of leading climate authorities have now confirmed the return of El Niño, a weather pattern associated with drought conditions in South Africa that can disrupt agricultural production and drive up food prices.
