South Africa inflation rises less than expected, helped by food

By Tannur Anders

South Africa’s inflation rate rose less than expected in November, staying just below the central bank’s target range thanks to food inflation slowing to its lowest level in almost 14 years.

Headline consumer inflation was 2.9% year on year in November from 2.8% in October. In month-on-month terms, inflation was at 0.0% in November, compared with -0.1% in October, Statistics South Africa data showed.

Economists polled by Reuters had forecast headline inflation would accelerate to 3.1% in annual terms. The South African Reserve Bank targets inflation of between 3% and 6%, aiming for the midpoint of that band.

“We expect inflation will continue to edge higher over the coming months. But it is likely to remain contained and stay below the 4.5% target midpoint,” Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said.

The central bank last month cut its main lending rate by 25