Surprise dip in inflation offers relief to consumers
Inflation is hitting the rich hardest, Stats SA's figures show
Inflation surprised economists by slowing in May to 4.4% from April’s 4.5%. Inflation was expected to continue its rise from a low of 3.8% reached in March, with an economists’ consensus that average price increases would rise to 4.6%. "While we expect inflation to increase, we do not foresee a climb to above the Reserve Bank’s 6% upper target range for inflation over the next three years," Nedbank's economics team said in a note e-mailed after Statistics SA released May's consumer price index (CPI) report. "This relatively benign inflation outlook and the still weak economy will probably convince the monetary policy committee to delay hiking rates for as long as possible. We forecast that rates will remain unchanged into the second half of 2019 before a mild upward cycle commences." The food component of CPI showed annual inflation of 3%, down from 3.7% in April, helped by average fruit prices falling 6.4% and bread and cereals getting 4.1% cheaper over the year. May’s fuel inflati...
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