Stats SA reported that annual inflation accelerated to 5.9% in March, just shy of the upper limit of the Reserve Bank’s target range. The Bank’s monetary policy committee forecast in March that inflation would average 6.2% — above the 3%-6% target range — in the second quarter before dropping back into the range thereafter. The recent trend in other countries has been upside surprises in inflation outcomes, which is affecting what central banks do even though they should care more about inflation expectations.

That inflation will exceed the target range in SA is now the consensus view. The drivers are common to all countries: high oil and food prices caused by the Ukraine war, and a general increase in inflation on the back of the Covid-19 disruptions to value chains. The latter still prevails, with rising Covid-19 infections in Shanghai and hard lockdowns...

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