South Africa\u2019s annual inflation rate rose above the midpoint of the central bank\u2019s target range for the first time in 15 months in February driven by higher fuel prices.<\/p>\n
Consumer prices increased 4.6% from a year earlier compared with 4.5% in January, Pretoria-based Statistics South Africa said Wednesday in a statement on its website.<\/p>\n
The median estimate of 16 economists in a Bloomberg survey was 4.5%. Prices rose 1% from January, the highest monthly rate since February 2017.<\/p>\n
The uptick is unlikely to deter the central bank from cutting the benchmark interest rate on Thursday. More than half of the 21 economists in a Bloomberg survey predict a 50 basis-point reduction.<\/p>\n
Bets on easing increased after president Cyril Ramaphosa declared a national state of disaster over the coronavirus pandemic and the US Federal Reserve lowered its main rate to almost zero.<\/p>\n
Inflation was driven by a 14% increase in gasoline prices in February compared with the same month last year, but is expected to moderate over the coming months on the back of a sharp decline in oil prices. That could lead to the central bank lowering its price-growth forecast for the year from 4.7%.<\/p>\n
The monetary policy committee is also likely to slash its forecasts for the expansion of an economy that slumped into a second recession in two years even before the coronavirus intensified.<\/p>\n
Annual core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, accelerated to 3.8% to from 3.7%.<\/p>\n