JOHANNESBURG - South Africa’s inflation rate in February increased 4 percent, easing from a 4.4 percent rise in the prior month. February’s print was the lowest inflation level since the March of 2015.
The slowdown in inflation was agitated by prices slowing mostly for food and transport.
Meanwhile, annual core inflation rate which excludes cost of food, non-alcoholic beverages, petrol and energy was unchanged at 4.1 percent in February, remaining at its lowest level since December 2011.
Annabel Bishop, the chief economist at Investec, said the lower inflation outcome today does not necessarily signal lower interest rates as the South African Reserve Bank. “The SARB bases its interest rate decisions on what inflation is likely to be six to twenty-four months in the future not what it has come out recently at,” Bishop said.
“Consumer Price Index (CPI) inflation is likely to average around 5.5 percent for next year, and over the longer-term and so the SARB is unlikely to cut interest rates on this basis.”
The Reserve Bank today said South Africa's current account deficit increased to R137.5 billion in the fourth quarter of 2017 from R99bn in the previous period. This was the largest current account gap since the first quarter of 2016.
- BUSINESS REPORT ONLINE