Connect with us

General News

South Africa inflation counters forecasts as food prices fall :: Kenya

Published

on

Loading...

[ad_1]

A customer shops at a South African retailer. [Photo: Reuters]

JOHANNESBURG – South African inflation came bang in line with expectations in October with food prices edging lower while the impact of higher global oil prices was subdued, data showed on Wednesday.

South Africa’s headline consumer inflation rose to 5.1 percent year-on-year in October, data from Statistics South Africa showed on Wednesday. A Reuters poll had forecast price-growth at 5.1 percent.

ALSO READ:

SA’s rand weaker in overnight trade

Africa’s most industrialised economy is in a recession, upping pressure on the central bank to cut rates to support growth. The bank said at its last meeting in September it was more concerned about the deteriorating inflation outlook and that rates were already accommodative.

That has fed expectations of a rate increase at its policy meeting on Thursday, with 16 out of the 26 economists polled by Reuters last week predicting the Reserve Bank would keep its repo rate at 6.50 percent, while the rest forecast a 25 basis-point hike.

On Tuesday, forward rate markets were pricing in a near 50-50 chance of a 25 basis points rate increase, but on Wednesday that figure was down to a 30 percent probability.

Governor Lesetja Kganyago has said the bank wants inflation nearer 4.5 percent, the mid-point of its target range of 3 to 6 percent – leading to market expectations of a hike.

Loading...

“Doves will think ‘Aha! So the SARB doesn’t have to hike after all’”, chief Africa economist at Standard Chartered Razia Khan said. “We however think the reasons for the tightening have more to do with the inflation outlook two years down the line, than the print for last month.”

Get live updates in Agriculture by subscribing to the new farmers TV SMS service. Text the word ‘Farmers’ to 22071.

Would you like to get published on Standard Media websites? You can now email us breaking news, story ideas, human interest articles or interesting videos on:



[ad_2]

Source link

Loading...
Advertisement
Loading...
Loading...

Facebook

Loading...

Trending