South African inflation slows as food prices ease

South Africa’s inflation rate fell for a second consecutive month as food costs eased.

Consumer prices rose 5.2% in April from a year earlier, compared with 5.3% in the prior month, Pretoria-based Statistics South Africa said Wednesday in a statement on its website.

The median of 18 economists’ estimates in a Bloomberg survey was for the inflation rate to remain unchanged.

The data is unlikely to convince monetary policymakers who meet next week to lower the benchmark rate that’s remained at a 15-year high of 8.25% since May 2023.

Governor Lesetja Kganyago has repeatedly stressed that the central bank will wait for inflation to slow to the midpoint of its 3% to 6% target range before the policy is adjusted.

While this is a positive move for inflation, the figure is still some way off from the South African Reserve Bank’s (SARB’s) target of 4.5% and feeds the “higher for longer” narrative on inflation and interest rates.

The central bank has repeatedly noted that it will not move its policy rate lower—heralding a cutting cycle—until inflation is under control and sustainably hitting that target.

Thus, interest rates are likely to remain on hold when the Monetary Policy Committee meets next week after the national elections.

According to Stats SA, housing and utilities, miscellaneous goods and services, food and non-alcoholic beverages (NAB) and transport were the main drivers behind the headline rate in April.

The monthly change in the CPI was 0.3% in April, softer than the 0.8% rise recorded in March.