The latest figures from Statistics South Africa (Stats SA) show that annual consumer price inflation (CPI) increased to 6.5% in May from 5.9% in April. That is the highest recording since January 2017 and the first time in five years the reading has breached the central bank’s 3-6% inflation target band.
Stats SA will release the June CPI figures on 20 July, a day before the South African Reserve Bank’s (SARB’s) MPC is scheduled to meet to announce its next interest rates decision.
Zahabia Gupta, S&P Global Ratings’ primary sovereign analyst on South Africa; Martyn Davies, MD of emerging markets and Africa at Deloitte; and Christie Viljoen, a senior manager and economist at PwC, forecast another 50 basis points hike to the SARB’s key policy rate.
Says S&P’s Gupta: “While the cost of essentials has increased, unemployment is higher than before the pandemic. Labour-intensive sectors, such
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