2 days ago
Inflation hits 10-month high at 3.5% in July
The key drivers of price growth in July were food and non-alcoholic beverages (up 5.7% and contributing 1.0 percentage points). Photo: Supplied
South Africa's annual consumer inflation accelerated to 3.5% in July from 3.0% the previous month, driven by food and non-alcoholic beverages,
This was the second consecutive year-on-year increase and the highest rate in 10 months.
On a month-on-month basis, consumer prices rose by 0.9% in July, after a 0.3% increase in June.
The key drivers of price growth in July were food and non-alcoholic beverages (up 5.7% and contributing 1.0 percentage points) and housing and utilities (up 4.3% and contributing 1.0 percentage points), the statistics agency said. During the period, the annual inflation rate for goods was 3.2%, up from 2.3% in June, and services was 3.6%, down from 3.7% in the previous month.
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'It is important to sustain this progress and to minimise uncertainty about the longer-term objectives of monetary policy,' Kganyago said in the July MPC meeting.
'Therefore, the [monetary policy committee] now prefers inflation to settle at 3%. In line with this, we have decided to aim for the bottom of our inflation target range, of 3 to 6%.'
'We welcome the recent moderation in inflation expectations and would like to see expectations fall further. This would expand policy space and make our framework more robust to shocks. We will use forecasts with a 3% inflation anchor at future meetings.'
