MBABANE - Eswatini’s inflation outlook has taken a worrying turn after the country’s annual inflation rate accelerated to 2.0 per cent in April 2026 from 1.6 per cent recorded in March.
This reinforces concerns that the era of ultra-low inflation may be coming to an end as global and domestic cost pressures intensify. The latest Consumer Price Index (CPI) report released by the Central Statistical Office (CSO) on Friday showed that inflationary pressures are now steadily filtering through the economy, largely driven by rising electricity costs, fuel prices, transport expenses and housing-related charges.
While the inflation rate remains significantly lower than the 3.3 per cent recorded in April 2025, economists warn that the latest increase may mark the beginning of a broader upward trend that could influence the next interest rate decisions by the Central Bank of Eswatini.
The renewed rise in inflation comes at a time when the country’s monetary authorities are increasingly concerned about growing global instability, particularly geopolitical tensions in the Middle East, volatile oil prices and exchange rate risks.
In his recent annual monetary policy statement, Central Bank Governor Dr Phil Mnisi warned that inflationary pressures were expected to strengthen over the short to medium term as underlying risks continue to emerge across the global economy. The latest CPI report appears to support those concerns.
According to the report, headline inflation increased by 0.33 percentage points from 1.6 per cent in March to 2.0 per cent in April. Month-on-month inflation also recorded a sharp increase, rising to 1.2 per cent in April from negative 0.1 per cent in March, indicating that prices rose considerably within a single month.
The data showed that some of the strongest inflationary pressures came from housing and utilities, which rose from 0.0 per cent in March to 3.9 per cent in April. Transport inflation also accelerated from negative 0.2 per cent to 2.4 per cent over the same period.
The CSO attributed these increases mainly to higher electricity tariffs, water supply costs and fuel-related price increases.
Detailed CPI figures revealed that electricity prices surged by 15.1 per cent year-on-year, while liquid fuels increased sharply by 23.3 per cent. Water supply costs rose by 4.0 per cent annually.
Fuel and lubricant costs for personal transport also increased significantly, rising by 8.8 per cent year-on-year, further placing pressure on transport-related household expenses.
Economists say these developments are particularly concerning because fuel price increases tend to spread throughout the broader economy, affecting transportation, logistics, production and food distribution costs.
The renewed inflationary pressure is also emerging at a time when global oil markets remain highly volatile due to escalating tensions in the Middle East.
Dr Mnisi recently cautioned that global oil prices, driven by geopolitical instability, were expected to place upward pressure on fuel prices, which would directly affect transport inflation before eventually feeding into food inflation and other consumer costs.
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… CBE’s inflation forecast rises in inflationary pressures
MBABANE - The Central Bank of Eswatini’s own inflation forecasts already suggest that inflationary pressures are expected to rise considerably during the remainder of the year.
In March 2026, domestic inflation was forecast at 3.1 per cent for the second quarter of 2026 before rising to 4.0 per cent in the third quarter and 4.2 per cent in the fourth quarter. Overall, inflation is expected to average 3.3 per cent for 2026. This means the current 2.0 per cent inflation rate may only represent the early stages of a broader upward inflation cycle.
The Governor, Dr Phil Mnisi, further warned that the domestic monetary policy environment remained highly uncertain due to the continuing geopolitical conflict in the Middle East as well as escalating global trade tariff tensions.
He noted that disruptions in the supply of agricultural inputs, particularly fertiliser, posed an additional threat to future food inflation. Such risks are especially important for Eswatini given the country’s dependence on imported fuel, agricultural inputs and manufactured goods.
While food and non-alcoholic beverages remained in negative inflation territory at negative 0.9 per cent in April, the broader outlook suggests food inflation could return in the coming months if global pressures persist. Some food categories are already recording strong price increases despite the broader food deflation. Fruit prices increased by 9.0 per cent year-on-year, while fish and seafood prices rose by 6.4 per cent. Milk, cheese and eggs increased by 2.1 per cent, while coffee, tea and cocoa recorded inflation of 3.1 per cent.
Although bread and cereal prices declined by 4.0 per cent and vegetable prices decreased by 1.2 per cent, economists caution that rising transport and fuel costs could eventually reverse these gains if supply chain costs continue increasing. Beyond food and transport, other expenditure categories also recorded notable price increases.
Clothing and footwear inflation stood at 5.2 per cent, with footwear prices increasing by 6.6 per cent annually. Alcohol beverages, tobacco and narcotics recorded inflation of 4.4 per cent, while restaurants and hotels rose by 3.2 per cent.
Accommodation services alone recorded inflation of 4.5 per cent, reflecting increasing operational costs within the hospitality sector. The report also highlighted growing pressure from administered prices, which include regulated or government-influenced costs such as utilities and fuel-related adjustments.
Administered prices increased sharply by 6.2 per cent year-on-year, while non-administered prices rose by only 0.8 per cent. This indicates that much of the recent inflationary pressure is being driven by utility costs, fuel adjustments and other controlled pricing mechanisms rather than broad-based consumer demand. Analysts say this creates a difficult balancing act for the Central Bank.
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Central Bank of Eswatini Governor Dr Phil Mnisi. (File pic)