Consumer inflation comes in at 4.6% for August
eased more than economists’ forecast to “4.6% year-on-year,” reports IOL
. This brings it down 0.4% from the 5% reported for July
Economists’ expected inflation to come in at 4.7% for August, notes BDLive
Looking at the data on a month-on-month basis, there was no change, says Fin24
. The announcement also took pressure off the Reserve Bank’s monetary policy committee’s decision over whether to hike interest rates or not.
The governor of the Reserve Bank announced this afternoon that interest rates would remain unchanged
for the moment.
The major factor leading to a drop in inflation was “negative growth in transport inflation due to the weak oil price,” reports the SABC
. This led to the price of petrol and diesel falling.
At the beginning of August, petrol prices fell 51c
. And the impact of lower fuel prices could be evident this month on inflation as petrol prices fell a further 69c
This keeps inflation within the Reserve Bank’s target range of between 3% and 6%.
The upward pressure on consumer inflation remains a worry
The Inflation Factory points out that “this is the first monthly decrease in year on year inflation,” after five consecutive months of rising, says Fin24
. But it warns projections show the year on year rate will keep increasing until the start of the New Year, “with a strong change of breaching” the top end of the central bank’s target in the first few months of the year.
So good news for now on the inflation front. But with the rand trending sharply weaker, inflation may start to reflect this.
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