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Economists expect consumer inflation in 2024 to average 5%

Details

BL Premium reports that consumer inflation remained at 5.2% in May, unchanged from April and down slightly from 5.3% in March, Stats SA said on Wednesday.

This was broadly in line with economists’ expectations, and forecasts for inflation to remain sticky at about 5% until later in the year. Nedbank expects inflation to decelerate below 5% during the fourth quarter to end the year at about 4.6% – close to the midpoint of the SA Reserve Bank’s (SARB’s) target range of 3%-6%. Oxford Economics has adjusted its expectation for headline inflation to average 5% for the year, compared with 5.2% previously. “The latest inflation print points to some stickiness, but stronger disinflation could see the headline rate at the 4.5% midpoint by the fourth quarter. Sizeable fuel price cuts in June imply that overall inflation should ease further at the end of the second quarter, which was not our expectation initially,” said Jee-A van der Linde of Oxford Economics. Given the improvement in the inflation outlook, Van der Linde said the odds that the SARB could implement a 25 basis point rate cut in September had risen. Shannon Bold of the Bureau for Economic Research (BER) said they also expected inflation to moderate throughout the rest of the year, averaging about 5% in 2024. “This should bode well for a repo rate cut or cuts later in the year provided that inflation expectations of price-setters, namely trade unions and businesses, start to trend lower,” he commented.

  • Read the full original of the report in the above regard by Denene Erasmus at BusinessLive (subscriber access only)
  • Read too, Inflation still high but could there be a repo rate cut up ahead? at The Citizen


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