South African inflation slowed to a seven-month low in December, though mounting price pressures including a sharp increase in electricity costs may force the central bank to keep interest rates higher for longer.

The headline consumer-price index rose 7.2% from a year earlier, compared with 7.4% November, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. The median of 15 estimates in a Bloomberg survey of economists was 7.3%.

Inflation averaged 6.9% in 2022, up from 4.5% in the previous year, statistics office data show. That’s the highest level since 2009, when rising electricity costs also added to price pressures, and is the highest annual average of Lesetja Kganyago’s tenure as central bank governor.

While the rate of price growth is expected to slow in 2023 as the worst global inflation shock in a generation eases, it could take longer to approach 4.5% — the midpoint of the central bank’s target range at which the monetary policy committee prefers to anchor expectations.

Despite December’s slowdown, the change in the headline inflation rate breached the target ceiling for an eighth-straight month. Core inflation, which excludes the costs of food, non-alcoholic drinks, fuel and electricity, remains elevated, suggesting price pressures are broad-based.

South Africa’s average inflation expectations for the next two years have increased, according to a survey of analysts, business people, labor unions and households conducted by the Stellenbosch-based Bureau for Economic Research. The poll was conducted before the national energy regulator allowed cash-strapped power utility Eskom Holdings to increase tariffs by 18.65% and 12.74% for the next two years.

Blackouts of as long as 12 hours a day imposed by the state-owned company add to the risks to the inflation and economic growth outlooks. Eskom, responsible for generating almost all of South Africa’s electricity, implements outages to protect the power grid from collapse as its aging, mostly coal-fired power plants fail.

Kganyago affirmed the South African Reserve Bank’s commitment to taming the “monster of inflation” in November, when the MPC lifted borrowing costs by 75 basis points for a third straight meeting to 7%. The aim of policy is to anchor price-growth expectations more firmly around the target midpoint and to “increase confidence of attaining the inflation target more sustainably over time,” he said.

The central bank will revise its forecasts for inflation and gross domestic product growth next week.

After front-loading its fight against inflation, concerns about South Africa’s economic prospects could see it slow the pace of rate hikes. Forward rate agreements used to speculate on borrowing costs show traders are pricing in an 80% chance of 25 basis-point increase for the MPC decision scheduled for January 26.