The annual inflation charge slowed sharply to 2.8% in October, information confirmed on Wednesday, setting the stage for one more rate of interest reduce by the South African Reserve Financial institution this week.
Statistics South Africa stated falling gas costs had been the first driver of the slowdown within the headline charge from 3.8% in September. October’s studying is the bottom inflation has been since June 2020, in the course of the peak of the Covid-19 pandemic.
Impartial economist Elize Kruger stated gas and meals value developments play a larger function in October, which is taken into account a low survey month. South Africa’s government-regulated petrol and diesel costs fell by greater than R1/l in October.
Economists had forecast inflation would gradual to three.1%, effectively beneath the 4.5% the Reserve Financial institution goals for however simply inside the financial institution’s 3%-6% goal vary. The Financial institution will announce its subsequent rate of interest choice on Thursday.
A Reuters ballot printed final week predicted the Financial institution would decrease its repo charge by 25 foundation factors, the identical measurement of reduce as in September, when it reduce charges for the primary time in additional than 4 years.
“Given latest Sarb rhetoric, the latest rand depreciation and a conservative [monetary policy] committee, a 25 foundation level reduce stays the base-case forecast,” Kruger stated. — Bhargav Acharya, Kopano Gumbi and Tannur Anders, (c) 2024 Reuters
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