# The South African Reserve Bank warns that the ongoing Iran war presents significant upside risks to inflation; however, it currently expects inflation to stay within a one-percent tolerance band of its three-percent target. In its twice-yearly Monetary Policy Review, the central bank expects headline inflation to average 3.7-percent this year before easing back to target by late 2027. SARB governor Lesetja Kganyago says South Africa is better equipped to handle the energy shock due to the war compared to the 2022 crisis, crediting a lower inflation target and ongoing fiscal consolidation.
SARB says the Middle East conflict has presented material upside risks to the country’s inflation trajectory