Johannesburg – South Africa’s consumer inflation has dropped to 5.2 percent in April ahead of the 6th General election.
Statistics South Africa says inflation eased for the second time to a four-month low of 5.2 percent in April 2024 – slightly down from 5.3 % in March.
This is still between the Reserve Banks target if between 3 and 6%.
This is good news for cash-strapped consumers as the Bank may look at decreasing the repo rate – the rate at which the SARB lends money to commercial banks.
It means that consumers may pay less for their debt.
All eyes are on the United States Federal Reserve, which may begin dropping its rate.
Most central banks around the world have been following the U.S. Fed when it comes to rates.
However, Switzerland was the first to break this trend this year by decreasing its rate.
The slowdown in South Africa is due to a decrease in food and non-alcoholic beverage prices in March with most subcategories experiencing lower annual rates except for vegetables, fruit, and Hot beverages.
But experts say an interest rate cut is not to be expected when the Monetary Policy Committee meets next.
South Africa goes to the polls on Wednesday 29 May.
Analysts say South Africa’s Inflation rate is expected to reach 5.10 percent by the end of this quarter.
In the long term, the South Africa Inflation Rate is projected to average around 4.60 percent in 2025 and 4.50 percent in 2026, according to Statistics South Africa.
South African and U.S. households have continued to feel pinched by inflation – even as price pressures ebb.
The US Federal Reserve reported on Tuesday that with most Americans saying their financial situation had changed little in the past year, many parents reported times had become harder.
About 72% of adults are doing alright financially as of October 2023, the Fed’s annual survey on household economics and decision-making showed.
