JOHANNESBURG, Aug. 21 (Xinhua) — South Africa’s annual consumer price inflation slowed to 4.6 percent in July from 5.1 percent in June, reaching the lowest level in three years since July 2021, official data showed Wednesday.
In July, lower annual inflation rates were recorded for several product groups, most notably food and non-alcoholic beverages, transport, and housing and utilities, according to data released by Statistics South Africa (Stats SA).
The annual inflation rate for food and non-alcoholic beverages stood at 4.5 percent in July, down from 4.6 percent in the previous month. “Food and non-alcoholic beverages have registered a slowing inflation trend since its most recent high of 9 percent in November 2023 and are currently at their lowest since September 2020,” said Patrick Kelly, chief director for price statistics at Stats SA.
Fuel prices receded for a second straight month, which dropped 3.6 percent in July, following a 4.6 percent decrease in June, the data showed.
The inflation for housing and utilities rose by 2.6 percent month-on-month in July, driven by new electricity tariff hikes implemented by municipalities, leading to an annual inflation increase of 5.3 percent, lower than 5.5 percent in June.
If South Africa’s overall inflation continues to decline, the South African Reserve Bank, the country’s central bank, is likely to cut interest rates later this year, Jannie Rossouw, an economist at Wits University, told Xinhua, who cautioned that inflation expectations remain a concern.
“We’re pleased to see this downward trend, indicating that monetary policy measures, including repo rate hikes, are yielding results. If inflation continues to decline and inflation expectations drop, it will create room for repurchase rate cuts,” Rossouw said.
