South Africa’s inflation rate rose for the first time this year in May after food-price growth quickened from the slowest pace since December 2015.
Consumer-price inflation accelerated to 5.4 percent from 5.3 percent in April, matching the median estimate of 22 economists in a Bloomberg survey and staying within the central bank’s target range for a second month. Prices increased 0.3 percent in the month, Statistics South Africa said in a report released Wednesday in the capital, Pretoria.
Food prices rose 7 percent from a year earlier, snapping four months of slowdowns and accelerating from April’s 6.6 percent, the statistics agency said. Corn prices have plunged 67 percent since reaching a record in 2016, as the country recovers from the worst drought on record and is set for its biggest harvest of the grain since 1981.
The benchmark repurchase rate has remained unchanged since March 2016 as the central bank looked to support growth in an economy that entered the second recession in almost a decade in the first quarter.
Inflation is likely to move to the middle of the central bank’s target range of 3 percent to 6 percent because of decelerating food-price growth, Governor Lesetja Kganyago said in a speech in Johannesburg Monday.
“If we can keep inflation lower, anchoring inflation expectations, that should in turn generate a lower rate of interest to support the economy,” Kganyago said.
Bloomberg