South Africa: Sigh of relief to South African consumers as inflation lowers

Residents of
South Africa have every reason to smile following a fall in inflation for the
first time in nearly a decade.

According to
Business Report, cash-strapped consumers have allayed fears that the decision
by the South African Reserve Bank (SARB) could curtail Christmas spending,
following reports of inflation backdrop released on Wednesday.

SARB is
expected to make it decision today based on Statistics data released yesterday,
showing that significant inflation reduced to 3.7?percent in October.

According to
the report, food, alcoholic, non-alcoholic beverages, as well as tobacco and
transport, contributed to the inflation decline.

The decline
comes in the 31st month that inflation fell below SARB’s target of 3-6?percent,
with market consensus standing at 4?percent.

September
report shows that, inflation decline stood at 4.1?percent.

The decline
comes against a backdrop of a further decrease in food inflation to 3.5?percent
from 3.7?percent in September.

Transport reduced
to 0.3?percent, contributing an overall inflation of 0.1?percentage.

Business
Report further writes that, SARB’s Monetary Policy Committee (MPC) will today (Thursday)
announce its rates decision, after it cut the repo rate by 25 basis points in
July from 6.75?percent to 6.5?percent, and decided to keep it unchanged in
September.

In October, SARB
slashed the country’s growth forecast to 0.5?percent from 1.5?percent.

South
Africa’s inflation has been quite stable for the past years, levelling off
between 4.58 and 6.3 percent.

The country
expects to stabilize its inflation at around 5 percent by the year 2024.