Inflation falls to five-year low in March as fuel, education costs ease

By Sfundo Parakozov and Kopano Gumbi

South Africa’s annual inflation rate fell for the first time in five months in March to its lowest level since June 2020, due to a drop in fuel costs and softer price rises for tuition.

Headline consumer inflation eased to 2.7% year-on-year from 3.2% in February, below the 2.9% expected by economists polled by Reuters, and outside the South African Reserve Bank’s (SARB) 3% to 6% target range.

A breakdown by Statistics South Africa showed the fuel index was down 8.8% last month.

Education fees, which are surveyed once a year in March, increased 4.5%, slower than the previous year’s 6.4% rise.

Some analysts thought the latest inflation numbers gave the central bank scope to cut interest rates at its next monetary policy meeting in May.

“There is ample room for the (central bank) to cut rates further to support the economy, to soften the hit from the