JOHANNESBURG, Dec 12 (Reuters) – South African analysts, business people and trade unions have lowered their inflation expectations through to 2026, taking them to the midpoint of the central bank’s inflation target range, a quarterly survey showed on Thursday.

The findings are likely to encourage the South African Reserve Bank (SARB) to forge ahead with its monetary easing cycle, potentially by cutting interest rates in larger increments.

The fourth-quarter survey conducted by the Bureau for Economic Research found that the average inflation forecast of analysts, business people and labour unions was for headline consumer inflation of 4.6% in 2024, 4.5% in 2025 and 4.6% in 2026.

That is down from average forecasts of 5.1%, 4.8% and 4.8% in the third-quarter survey and the lowest expectations have been in more than three years.

The SARB likes to see inflation around 4.5%, the midpoint of its 3% to 6% target band.

It has lowered its main lending rate by 25 basis points (bps) at each of its last two meetings.

But some analysts believe there is room for a 50 bp cut at the next policy meeting in January.

Data on Wednesday showed headline consumer inflation stood at 2.9% year on year in November, below the target band for the second month in a row thanks to food inflation slowing to its lowest level in almost 14 years.

(Reporting by Kopano Gumbi; Editing by Alexander Winning, Kirsten Donovan)