South Africa’s inflation rose sharply in September but it stayed within the central bank’s target range, encouraging analysts’ expectations that interest rates would be left unaltered in November.
Statistics South Africa had remarked that headline consumer inflation rose to 5.4% year-on-year in September from 4.8% in August with food, fuel and transport being the biggest contributors of the inflation.
The South African Reserve Bank–SARB, targets inflation between 3% and 6% and wishes to see it around the midpoint of that range.
Meanwhile, Economist Elize Kruger has stated that headline inflation would probably remain above 5% until the third quarter of 2024 and that the current level of interest rates was adequately restrictive.
In her words:
“The SARB will keep rates unaltered at this level for a pro-longed period, before a first cut in interest rates would be put into consideration.”
Kruger had additionally cautioned that the impact of a poultry calamity in the country on food inflation would be seen only in the October print.
South Africa is at present, dealing with its worst outbreak of avian flu, hitting egg and chicken meat suppliers badly. Millions of chickens have been killed and several grocery retailers are reducinv the number of eggs customers can buy.
The SARB issued a warning on Tuesday, October 17, warning that upside risks to inflation had intensified over the past months, raising uncertainty about an exact path for inflation.
