Consumers can breathe a sigh of relief as the Consumer Price Inflation (CPI) eases from 6.3% in May to 5.4% in June 2023. This as data released by Statistics South Africa shows that the CPI eases in June 2023.
The annual rate of CPI has fallen back within the South African Reserve Bank’s (SARB) target range of 3 to 6% for the first time in over a year.
The main contributions to the inflation rate came from food and non-alcoholic beverages, housing and utilities, and miscellaneous goods and services.
Food inflation, which has been one of the main drivers of inflation, eased by 0.8 percentage points in June 2023.
Meanwhile Chief Economist at Standard Bank, Goolam Ballim, says the slowdown in the consumer price inflation will be long-lasting.
Ballim says the Reserve Bank is expected to leave interest rates unchanged when it announce its decision on Thursday.
“This deceleration will be enduring. We think that the inflation number combined with the rand’s recent recovery following the material relapse with the Lady R matter will likely hold the Reserve Bank’s hand. In other words, we think that the Reserve Bank is unlikely to raise rates when it meets and in fact we may be at the cusp of the Reserve Bank’s monetary policy tightening cycle.”
In the related video below, economists earlier predicted that inflation is expected to fall below SARB’s target:
