Bad news for interest rates in South Africa

South African inflation accelerated after the statistics office revised the data used to calculate household expenditure, giving policymakers reason to be cautious about cutting interest rates next month.

Consumer prices rose 3.2% in January from a year earlier, compared with unrevised 3% in the prior month, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday.

That matched the median of 16 economists’ estimates in a Bloomberg survey.

The quickening may add to concerns about South Africa’s inflation outlook, which is being clouded by external shocks spawned by the Trump administration’s policy onslaught.

South African Reserve Bank Governor Lesetja Kganyago, in a Bloomberg interview this week, cautioned that rising tariffs are a risk to the global economy and may disrupt the disinflation process, reversing central banks’ interest rate-cutting cycles.

South African policymakers cut interest rates by 25 basis points to 7.5% last month after two quarter-point reductions last year.

Forward rate agreements, used to speculate on borrowing costs, are pricing in a 24% chance of a quarter-point reduction in the interest rate on March 20.