South Africa inflation rate drops to six-month low in July

South Africa’s annual inflation rate fell to a six-month low in July.

Consumer price growth slowed to 4% from 4.5% in June, the Pretoria-based Statistics South Africa said Wednesday in an emailed statement.

The median estimate of 15 economists in a Bloomberg survey was 4.3%.

Key Insights:

  • Inflation has remained at or below the 4.5% midpoint of the central bank’s target band every month since December, the longest such streak in more than eight years.
  • The Monetary Policy Committee revised its inflation forecast for the year to 4.4% from 4.5% at its July meeting. The panel cut the benchmark interest rate by 25 basis points to 6.5%.
  • A volatile exchange rate and potential return to economic growth in the second quarter may limit the scope for further easing in 2019.
  • With consumer spending under pressure, the prices of clothing and footwear and household appliances rose less than 2% from a year before, adding to the lower inflation rate.

Read: IMF rumors may be the scare South Africa needs

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South Africa inflation rate drops to six-month low in July