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South Africa’s Inflation Rate Rises for First Month in Three
JOHANNESBURG (Capital Markets in Africa) – South Africa’s annual inflation rate rose for the first time in three months in February as food and transport prices increased.
Consumer-price growth accelerated to 4.1 percent from a year earlier compared with 4 percent in January. That matched the median estimate in a Bloomberg survey of 17 economists.
Key Insights
- Core inflation, which excludes the prices of food, non-alcoholic beverages, fuel and electricity, was 4.4 percent, matching the prior month’s rate.
- The South African Reserve Bank seeks to anchor inflation at the 4.5 percent mid-point of its target range of 3 percent to 6 percent to allow for flexibility in dealing with price shocks.
- The central bank lowered its 2019 inflation forecast to 4.8 percent in January from a previous estimate of 5.5 percent largely due to lower assumed oil prices. However, higher-than-expected electricity-tariff increases could add a further 0.3 percentage point to the forecast, Reserve Bank Deputy Governor Kuben Naidoo said last week.
- The Monetary Policy Committee will next week vote on the key interest rate, which it held at 6.75 percent at its previous meeting.
Source: Bloomberg Business News