Consumer inflation slows again, hinting at possible rate relief
The Reserve Bank could cut rates later in the year, with CPI inflation falling again in June
Inflation has continued to ease, suggesting the Reserve Bank could cut interest rates later this year. The consumer price index (CPI) rose 5.1% in June, slowing by 0.3 percentage points from 5.4% in May. The CPI measures changes in the price of consumer goods and services purchased by households in urban areas. "Inflation in some retail segments such as clothing, furniture and appliances continued to moderate or contract in June," Investec economist Kamilla Kaplan noted. "This reflects the effects of past rand appreciation, the weak demand environment and likely, increased competitive forces,} she said. "These considerations have also seen core inflation subside to 4.8% y/y from the recent peak of 5.9% y/y in December 2016." The contribution of clothing and footwear decreased from 0.2 of a percentage point in May to 0.1 of a percentage point in June, with the index increasing by 3.8% year on year. Transport prices rose 3.3% year on year, and their contribution to the overall CPI in...
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