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SA inflation declines to 3,7%

Consumer
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Figures by Statistics South Africa show that the Consumer Price Inflation declined to 3,7% in October from 4,1% in September 2019.

The main contributors to the reduction in the inflation rate came from food, housing and utilities as well as miscellaneous goods and services.

Economist at NKC African Economists Elize Kruger says the pleasantly unexpected figure should be incentive enough for the Reserve Bank to cut rates.

Kruger says, “The main reason for this is that higher fuel prices were completely offset by prices in the general inflation basket. Looking forward, we are now expecting headline CPI to average in 2019 at only 4,1% and an average in 2020 at 4,5% that is right in the middle of the Reserve Bank’s target band.”

“So, inflation in South Africa is well under control and it could just be that today’s favourable inflation outcome has opened a small window for a potential cut of 25 base points at tomorrow’s MPC meeting,” added Kruger.

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