There is hope among some economists that the Reserve Bank will leave rates unchanged for a little while longer amid another decline in the inflation rate.
Statistics South Africa says the main contributors to July’s 4.6% consumer price inflation rate were food and non-alcoholic beverages, housing and utilities as well as transport.
CPI declined from 4.9% in the previous month. However, Stats SA says on a month-on-month basis, CPI rose by 1.1% in July compared with 0.2% in June.
The South African Reserve Bank has an inflation target range of between 3 and 6%.
ABSA economist Miyelani Maluleke says as the base effects start to fall away the CPI comes down.
“The big driver here we are starting to see base effects on fuel inflation, and as these base effects start to fall away, we see headline CPI also coming down. Another key thing that we seeing here is food price inflation. We’ve seen a big push high in the last few months, you’ll remember that in May and June were at a near four-year high, but we have of course seen crop prices into this year being a bit more stable.”
Consumer inflation slows in July:
July 2021 Consumer Price Index from StatsSA: