Eskom and municipal price increases make it difficult to reach 3% inflation target

• The Reserve Bank's efforts to reach a 3% inflation target are complicated by government-run entities, such as Eskom and municipalities, raising prices by double or triple that rate.
• Eskom and municipal price increases are sticky, contributing to elevated inflation rates and making it difficult for the Reserve Bank to meet its 3% target, which is expected to take longer than initially anticipated.
• The Reserve Bank may need to hike interest rates and wait for inflation expectations to move lower before it can consider lowering interest rates, which could take until the first quarter of 2028 to achieve the 3% target.