Lower food prices have helped contain inflation, but a rise in the cost of fuel in May could offset this, figures to be released this week are expected to show. Inflation slowed for a third month running, to 5.3% in April, largely because of lower food prices. Lower inflation could provide an impetus for the Reserve Bank’s monetary policy committee to cut interest rates as early as July, some economists have said. But they expect a slight uptick in inflation in May due to a 30c-a-litre increase in the price of diesel and a 49c-a-litre rise in petrol during the month. Food and transport are major contributors to the Statistics SA inflation basket. Agricultural activity has improved consistently after an end to the drought in most of the country. The agricultural sector expanded, despite a slight decline in confidence during the second quarter, the Agbiz/IDC Agribusiness confidence index showed last week. May’s fuel increase was caused by a slight depreciation in the rand from March t...
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