JOHANNESBURG, Consumer inflation slowed down more than markets expectations in November with the latest report from Statistics South Africa (StatsSA) showing that the annual Consumer Price Index (CPI) rose 4.6 per cent in the month, down from 4.8 per cent in October.
Economists say the decline in the CPI rate of increase was because of a decrease in the fuel price inflation rate in November.
The petrol price increase at the beginning of November was less than the increase recorded in at the same period last year.
Food price inflation, another key driver of inflation has continued to moderate on the back of the dissipating drought in most parts of the country.
Inflation remains within the South African Reserve Bank (SARB) targeted range of 3.0 per cent to 6.0 per cent. However, Nedbank economist Busisiwe Radebe is concerned about the looming threats to the inflation outlook. The CPI slowed down to 4.6 per cent while the market expected 4.7 per cent; that slowdown was mainly due to transport.
Economists say another risk is the depreciation of the Rand which is expected to be further impacted by the outcome of the elective conference of the ruling party, the African National Congress (ANC) next week. What is going to happen with the Rand we don’t know, the SARB is taking the wait-and-see approach.
Given the risks to the inflation outlook, economists say the central bank is expected to keep interest rates unchanged in the coming months.
Source: NAM NEWS NETWORK