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BL Premium reports that consumer inflation eased to 2.7% in March, from 3.2% a month earlier, but despite the more favourable conditions economists remain unconvinced that the SA Reserve Bank (SARB) will cut interest rates soon.
Wednesday’s reading released by Stats SA marked the lowest year-on-year reading since the early months of the Covid-19 pandemic in 2020. Lower fuel prices, subdued domestic demand, easing infrastructure constraints and softer global oil prices all contributed to a favourable inflation environment. The rate was well below the SARB’s 3% to 6% target range. In March, the SARB kept the repo rate steady at 7.50%, citing rising inflation risks, global economic uncertainty and the potential impact of fiscal policy changes. “I don’t think the Reserve Bank will cut rates in May at the next MPC [monetary policy committee] meeting, despite conditions dictating that they should. I think the Reserve Bank will remain wary of global risks,” Old Mutual chief economist Johann Els commented. He did, however, expect the Bank to begin cutting rates from July onwards. FNB economist Koketso Mano forecast inflation to remain steady in April before resuming a rising trend in May.
- Read the full original of the report in the above regard by Jana Marx at BusinessLive (subscriber access only)
- Read too, Inflation cools to 2.7% thanks in part to cheaper fuel, at Fin24 (subscription or trial registration required)
- En ook, Inflasie op laagste vlak in vyf jaar, maar druk wyk nog nie, by Maroela Media
Get other news reports at the SA Labour News home page