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South Africa's Inflation Rate Rises for First Month in Three

South Africa's Inflation Rate Rises for First Month in Three

(Bloomberg) -- South Africa’s annual inflation rate rose for the first time in three months in February as food and transport prices increased.

Consumer-price growth accelerated to 4.1 percent from a year earlier compared with 4 percent in January. That matched the median estimate in a Bloomberg survey of 17 economists.

South Africa's Inflation Rate Rises for First Month in Three

Key Insights

  • Core inflation, which excludes the prices of food, non-alcoholic beverages, fuel and electricity, was 4.4 percent, matching the prior month’s rate.
  • The South African Reserve Bank seeks to anchor inflation at the 4.5 percent mid-point of its target range of 3 percent to 6 percent to allow for flexibility in dealing with price shocks.
  • The central bank lowered its 2019 inflation forecast to 4.8 percent in January from a previous estimate of 5.5 percent largely due to lower assumed oil prices. However, higher-than-expected electricity-tariff increases could add a further 0.3 percentage point to the forecast, Reserve Bank Deputy Governor Kuben Naidoo said last week.
  • The Monetary Policy Committee will next week vote on the key interest rate, which it held at 6.75 percent at its previous meeting.

To contact the reporter on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Ana Monteiro

©2019 Bloomberg L.P.