South African inflation slowed for the first time in three months in August, remaining close to the bottom of the central bank’s target range.
Consumer prices rose 3.1% from a year earlier, compared with 3.2% in July, Pretoria-based Statistics South Africa said Wednesday in a statement on its website. The median estimate of 14 economists in a Bloomberg survey was 3.2%. Prices rose 0.2% in the month, matching the median estimate.
The drop may provide some room for the central bank to ease policy further in November if the outlook for the economy continues to deteriorate. The monetary policy committee kept its key rate at 3.5% earlier this month after 300 basis points of easing and said inflation will remain close to the 4.5% midpoint of its target range in 2021 and 2022.
The benign outlook will allow monetary policy to remain accommodative for most of the next two years and for stimulus to be withdrawn in a gradual fashion, Fundi Tshazibana, a deputy governor of the central bank, said last week.
Core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, quickened to 3.3%, the highest level since March, from 3.2%.
Further easing of lockdown restrictions in August meant all items — except sports tickets — that are included in the inflation basket were available for sale. Substituted values were used for products including alcohol that weren’t legally available for sale during parts of July and August’s lockdown. Banned products comprised 4.1% of the weight of the headline index.
