2.8% inflation impacts Businesses in Eswatini

By Delisa Magagula

The Central Statistical Office has reported a slight decline in Eswatini’s inflation rate for July 2025, which edged down to 2.8% from June’s 2.9%, and significantly lower than July 2024’s 4.2%.

The report, compiled by the Ministry of Economic Planning and Development’s National Accounts unit, shows that prices for goods rose by 3.1%, while services increased at a slower pace of 2.4%.

Month-on-month, overall inflation fell by 0.1%, providing some relief for households and businesses navigating cost pressures.

Different sectors reflected contrasting price movements. The hospitality industry, including hotels and restaurants, saw prices surge 5.3% in July, reversing a 5.1% decline in June, as more people returned to dining out and accommodation services.

Meanwhile, food and non-alcoholic beverages became cheaper, with inflation at 0.6%, largely due to lower prices for fresh produce and bottled water.

Other notable changes include a significant rise in alcohol, tobacco, and narcotics, driven by higher beer prices, and slower growth in personal care services, which contributed to a reduction in the miscellaneous goods and services category to 3.8%.

Business Eswatini CEO, E Nathi Dlamini spoke on the implications of July’s inflation figures for the private sector.

“The moderation in inflation to 2.8% provides businesses with a more predictable environment for planning and operations. Input costs, especially for food and everyday goods, have eased slightly, allowing companies to better forecast expenditure and maintain margins,” he said.

In addition, he said that sectors like hospitality and alcohol are still facing upward price pressures, which will affect service costs and consumer demand.

Dlamini explained that the mixed inflationary trends would influence both household spending and investment decisions.

He noted that falling food prices could temporarily increase consumer purchasing power, while rising costs in certain services would require businesses to manage resources carefully.

“For retailers and service providers, these figures highlight the need to adjust pricing strategies in line with consumer affordability. Companies should also monitor cost inputs closely and consider operational efficiencies where possible,” he added.

Consumers may experience some short-term relief from the modest overall inflation decline. Lower food prices, particularly for fresh produce, can ease household budgets, while continued increases in service-related costs such as accommodation, dining, and alcohol may offset some of these gains.

According to the report, households will likely notice a slower rate of price increase for goods but must remain mindful of the sectors still seeing high inflation.

Mean stressed that this uneven inflation landscape requires consumers and businesses alike to plan expenditures strategically.

“Households benefit from moderation in the general price level, but the uneven trends across sectors mean that budgeting must still be careful. Food affordability improves, but costs in entertainment, hospitality, and beverages are rising, which affects disposable income,” Dlamini said.

Meanwhile, the July data provides guidance for Eswatini’s businesses on future planning. Retailers, manufacturers, and service providers can use the information to anticipate input cost trends, adjust pricing, and develop operational strategies that accommodate both rising and falling prices.

Dlamini emphasised that businesses should remain cautious, noting that sectors such as hospitality and alcohol remain sensitive to demand fluctuations.

“Stable or moderate inflation is an opportunity for businesses to plan investments, manage inventory, and align pricing with market conditions. Yet, companies must be vigilant in sectors where costs are rising, ensuring that growth and profitability are not compromised,” he stated.

July’s inflation figures suggest a continued moderation in consumer price increases, which could support economic stability in Eswatini.

Lower inflation benefits both households and businesses, contributing to stronger market confidence and the potential for sustainable growth.

The data also aligns with projections from regional economic analysts who forecast inflation in the country to average around 3.5% for 2025, indicating that the 2.8% recorded in July is slightly below expectations.

This moderation is attributed to falling food prices and relatively stable service costs, although sectors such as hospitality remain volatile.

“Businesses and policymakers should see these figures as part of a broader trend toward stabilisation” he said.

“The key is to maintain conditions that support steady consumer purchasing power, predictable costs for enterprises, and sustainable investment across sectors,” Dlamini added.

Worth mentioning is that, the July 2025 inflation report demonstrates an uneven but moderating price environment for Eswatini.

Goods prices have increased at a slower pace, while service sectors such as hospitality and alcohol remain areas of rising costs.

Through his comments, Business Eswatini CEO highlighted that the trends offer opportunities for business planning and operational stability while cautioning that sector-specific pressures persist.

Households can benefit from lower food prices but must continue monitoring costs in services that are still rising.