By 
By Siphesihle Dlamini
The Eswatini Inflation Forecast 2025- 2027 has been revised upwards, now expected to hit 5.25 per cent, up from the previously anticipated 4.87 per cent.
This revision follows a detailed assessment by the country’s central bank and highlights key domestic and global factors that will shape the nation’s inflation trajectory in the coming years.
Inflation, a measure of the rate at which the general level of prices for goods and services is rising, has become a significant concern in many economies worldwide, including Eswatini.
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The country’s inflation forecast for the year ahead reflects both domestic policy adjustments and global economic trends, which are expected to have a lasting impact on consumers’ purchasing power and cost of living.
According to the forecast, a significant factor in the upward revision of the inflation forecast is the anticipated increase in administered prices, particularly for essential utilities such as electricity and water tariffs.
These essential services play a crucial role in the day-to-day lives of households and businesses, and any price hikes in these areas tend to have a ripple effect across the economy.
According to the central bank’s latest report, the first quarter of 2025 is expected to see inflation rise to 4.39 per cent, up from the previously projected 3.77 per cent. In the second quarter, inflation is now forecast to reach 5.65 per cent, up from the earlier forecast of 4.96 per cent.
These increases are largely attributed to the planned tariff hikes for electricity and water, which are expected to impact the cost structure of both households and businesses.
“The domestic inflationary pressures are largely driven by the rising costs of administered prices. This will continue to weigh heavily on consumers, particularly those in lower-income households who are more vulnerable to price increases in essential services,” said the central bank in a statement.
On the global front, the forecast for oil prices has been revised downwards. The expected increase in global oil production is anticipated to exert downward pressure on international oil prices, which would, in turn, reduce the cost of imports for Eswatini, particularly fuel-related costs.
The decline in oil prices could, however, be offset by the country’s reliance on international oil markets. While oil price fluctuations play a significant role in the cost of transport and goods, the expected reduction in oil costs will provide some relief.
Moreover, the forecasted marginal improvement in the South African Rand (ZAR), Eswatini’s currency peg, is expected to contribute to a slight reduction in imported inflation.
The strengthening of the Rand is expected to have a twofold effect: first, by lowering the cost of imports, and second, by alleviating some of the inflationary pressures that have resulted from currency depreciation in recent years.
This improvement in the Rand’s value is expected to provide a cushion against the inflationary impact of domestic price hikes, particularly in the medium to long term.
While the global outlook offers some reprieve through lower oil prices and an improved exchange rate, domestic factors are set to continue driving inflation in Eswatini.
The medium-term inflation forecast for 2026 has been revised slightly upwards to 4.80 per cent, up from the initial projection of 4.70 per cent, as the pressure from administered prices persists.
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The Central Bank has also highlighted that despite some positive global factors, the upside risks of inflation will continue to stem mainly from domestic sources.
Key policy decisions around the pricing of electricity, water, and other essential services will play a critical role in shaping the inflationary outlook for the coming years.
With the economy adjusting to these price increases, the Bank emphasizes the need for balanced fiscal and monetary policies to mitigate the impact on consumers and businesses.
Inflationary pressures in the domestic economy, particularly in the first half of 2025, are expected to have a significant impact on disposable income, particularly for lower-income households who are already facing financial strain.
Looking further ahead, Eswatini’s inflation forecast for 2027 stands at 4.57 per cent, reflecting a gradual easing of price pressures.
While the country is expected to continue experiencing some inflationary pressures from administered prices, the longer-term outlook assumes that the domestic economy will stabilize, with some relief from global trends like improved oil production and a stronger Rand.
