The South African Reserve Bank (SARB) is expected to keep interest rates on hold next month, as headline consumer inflation softened for a second month in a row last month.
StatsSA this week reported that consumer price inflation (CPI) rose to 3.2% last month, up from 2.9% in February, while the consumer price index increased by 0.7% month-on-month.
According to Statistician-General Risenga Maluleke, the main contributors to the 3.2% annual inflation rate were food and non-alcoholic beverages, housing and utilities, transport and miscellaneous goods and services.
“Food and non-alcoholic beverages increased by 5.7% year-on-year and contributed 1.0 percentage point to the total CPI annual rate of 3.2%. Housing and utilities increased by 2.2% year-on-year, and contributed 0.5 of a percentage point,” said Maluleke.
We expect inflation to peak at a rate not higher than 5.1% next month before steadily moderating in the second quarter of this year
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Statistics South Africa has published its Consumer Price Index (CPI) for December 2020, capping off a year which saw an average annual inflation rate of just 3.3%.
This is the lowest annual average rate since 2004 (1.4%) and the second-lowest since 1969 (3%).
Annual inflation ended 2020 at 3.1% in December, slightly lower than November’s reading of 3.2%. The monthly increase in the CPI was 0.2%, up from 0% in November.
The food and non-alcoholic beverages category was the main driver of inflation in December, with a monthly increase of 0.5% and an annual rise of 6%. This was up from November’s annual reading of 5.8%.