SAfrica inflation stabilises

May 27, 2009
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, JOHANNESBURG, May 27 – South Africa\’s inflation rate stabilised at 8.4 percent in April, down by 0.1 point from last month, latest data showed on Wednesday as the country entered its first recession since apartheid.

The Consumer Price Index inflation stood at 0.5 percent on a monthly basis in April compared with 1.3 percent the previous month, according to Statistics South Africa.

But the price of food and non-alcoholic beverages were still up by 13.7 percent in April 2009, from 14,7 percent in March 2009, taking a toll on lower incomes with 43% of South Africans living on less than two dollars a day.

Increases in the price of petrol pushed up transport cost by 1.3 percent between March 2009 to April 2009, putting pressure on food prices.

The report comes as the Reserve Bank holds its monthly monetary policy meeting, with a further interest rate cut widely expected on Thursday.

South Africa has been slashing interest rates since December, as inflation eased while the economy came under pressure from the global economic crisis.

The country entered its first recession in 17 years as the crisis pounded demand for its exports, dragging the economy down 6.4 percent in the first quarter with worse than expected figures.

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