Inflation accelerates slightly in May
By Sunita Menon - Jun 19th, 11:24
Inflation accelerated slightly to 4.5% in May, giving impetus to calls for an interest cut in July.
Measured by the annual change in the consumer price index (CPI), inflation accelerated from April’s 4.4% — but remained at the midpoint of the Reserve Bank’s 3%-6% target band. Economists polled by Bloomberg expected inflation to remain flat at 4.4%.
While petrol prices continued to rise in May by 54c/l, subdued food price growth and underlying inflation countered this.
The main contributors to the inflation rate were food and non-alcoholic beverages, which contributed 0.5 of a percentage point; housing and utilities, which added 1.1 percentage points; transport, which contributed one percentage point; and miscellaneous goods and services, which added 0.9 of a percentage point.
Compared with a month ago, inflation accelerated by 0.3% as transport contributed 0.1 of a percentage point.
The annual change in CPI is the key measure used by the monetary policy committee (MPC) to set interest rates.
At its last meeting, in May 2019, the MPC adopted a more dovish tone than in previous meetings in 2019 and narrowly decided to keep the repo rate unchanged at 6.75%, with two of the five members voting for a 25-basis-point cut. Some analysts are pencilling in a cut at the next meeting, which is scheduled for July 16-18.
Last week, the Bank signalled its willingness to cut interest rates, saying inflation outcomes over the past 10 months mean policy has not been as accommodative as it could have been.Business Live
4 reasons to be hopeful about South Africa’s economy
12/09/2019 - 14:40
Markets responded positively to South Africa’s economic growth rebounding in the second quarter, up 3.1%, and 0.9% for the year to June 2019.
Smarter mobility key to a sustainable South Africa
11/09/2019 - 13:19
The World Economic Forum has revealed that by 2050, 70% of the world’s population will be living and operating in urban areas. Considering the resultant congestion and air pollution, which are already challenges requiring mitigation in 2019, mobility and energy should be top of mind for those making the shift towards cities of the future.
Manufacturing production shrinks for second month in July
11/09/2019 - 13:01
Manufacturing production recorded its second consecutive contraction in July, in line with analysts’ expectations.
Eskom: The largest threat to the stability of the SA economy
10/09/2019 - 09:45
On Tuesday 23 July, South African Finance Minister Tito Mboweni tabled a bill before the National Assembly which would see national state-owned power utility Eskom benefit from an allocation of R59 billion over the next three years.
African continental free-trade deal has a long way to go
09/09/2019 - 14:50
The African continental free-trade agreement (AfCFTA) is facing several challenges and it could be decades before there is a common market in which tariffs are largely abolished.