Figures released by Statistics South Africa show that the Consumer Inflation Price for 2020 was the lowest in 16 years and the second lowest in 51 years.
Annual inflation declined to 3.1% in December from November’s reading of 3.2%.
The main contributors to the slow down in December came from the food and non-alcoholic beverages category.
The average annual inflation rate for 2020 was 3.3%.
Independent Economist Elize Kruger says the low inflationary environment offers incentives for the Reserve Bank to keep interest rates unchanged.
“The Reserve Banks Monetary Policy Committee (MPC) will have it’s first meeting this coming Thursday. On the one side we’ve seen a slight recovery in economic growth, which in the third quarter of 2020 came out higher than expected. But one other side, we’ve seen inflation well under control. So I believe that the Reserve Bank will for the first meeting be conservative and keep interest rates unchanged,” explains Kruger.
SARB keeps repo-rate unchanged at 3,5% in November:
In November 2020, the Reserve Bank’s Monetary Policy Committee decided to keep the repo- rate unchanged at 3,5%.
Full statement below:
The Bank forecast inflation to average 3.2% in 2020.
Growth is projected to contract by 8.1% in 2020.
SA Reserve Bank announces November interest rate decision: