GROWTH in South Africa’s consumer prices fell to its lowest in more than 15 years as the cost of fuel declined and spending slowed amid the coronavirus lockdown.
At 2.1% year-on-year in May, according to national statistics agency figures published on Wednesday, inflation is also below the lower end of the central bank’s target range, 3% to 6%.
Analysts were divided on whether the declining inflation rate was likely to prompt the central bank to cut interest rates further.
“This number won’t be a surprise to the Monetary Policy Committee (MPC). Inflation will have to surprise in a major way to what they have in their forecasts. What they will be concerned about most is growth,” said Nedbank economist Busisiwe Radebe
In May, the South Africa Reserve Bank (SARB) cut rates to a record low 3.75%, to support an economy strangled by a lockdown now its in fourth month. The
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