Inflation slows unexpectedly in March
By Sunita Menon - Apr 18th 2018, 11:50
Inflation slowed to 3.8% in March, surprising economists who had expected it to accelerate slightly from February’s 4%.
February was expected to be the bottom of the inflation cycle.
Inflation is likely to rise in April when the increase in value-added tax (VAT) increase took effect.
The slowdown in inflation, as measured by the annual change in the consumer price index (CPI), was helped by March’s 36c/litre drop in petrol and 47c/litre drop in diesel prices.
The index, which was set to 100 in December 2016, was 106.2 points in March from 105.8 in February and 102.3 in March 2017.
Statistics SA reported that the transport component of CPI fell 0.7% from February to January. Over the year, transport was 2.8% more expensive.
The food component of CPI showed annual inflation of 3.6%, with deflation of 4.8% for bread and cereals mitigating a 10% rise in meat prices.
The annual change in CPI is the key measure used by the Reserve Bank’s monetary policy committee to set its repo rate. The committee is scheduled to announce its next interest rate decision on May 24.
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