February inflation eases in calm before the storm

By Thebe Mabanga

The inflation rate for February eased to 3.0% on the back of slowing food and fuel costs, but this may merely represent the calm before the storm as the outlook for inflation has been clouded by the regional war involving Iran.

On Wednesday, Statistics South Africa reported that the Consumer Price Index (CPI) fell to 3.0% in February, down from 3.5% in January.

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CPI excluding food and non-alcoholic beverages, fuel and energy also slowed to 3.0% from 3.4%. The outlook for inflation is now highly uncertain as the conflict in the Middle East enters its third week.

The hostilities have sent the price of oil above $100 per barrel, and the longer that shock persists the more the outlook deteriorates. Nedbank has now revised its average inflation forecast for the year from 3.4% to