SA's consumer inflation rises in July as expected
Economists polled by Reuters had forecast annual inflation would rise to 3.5%, within the central bank's 3% to 6% target range.
In month-on-month terms inflation was at 0.9% in July, compared with 0.3% in June.
Inflation has been well under control, giving the South African Reserve Bank (Sarb) room to cut interest rates at three of its four policy meetings so far this year.
Last month the Sarb cut its main lending rate by 25 basis points to 7.00% and signalled a shift toward a 3% inflation goal down from 4.5%, despite the finance minister not yet signing off on a formal target change.
Sarb governor Lesetja Kganyago has long advocated for a lower inflation target, arguing the current range is too broad and undermines the global competitiveness of Africa's largest economy.
Finance Minister Enoch Godongwana, whose responsibility it is to set the official inflation target, said earlier this month that there still needed to be further consultation and that he did not plan to announce a new target in the mid-term budget due around the end of October.