South Africa inflation jumps more than expected in June
Consumer prices rose 5% in June, above economists’ forecasts, as traders nearly fully priced in a quarter-point rate increase.
- On Wednesday, Pretoria-based Statistics South Africa reported annual consumer inflation accelerated to 5.0% in June, exceeding the median economist forecast of 4.7%.
- Transport costs drove the acceleration, as fuel prices climbed 34.3% in the 12 months to June, with Stats SA reporting diesel rose 50.8% and petrol increased 31.7%.
- Traders are pricing in a 25 basis point rate hike for Thursday, while average inflation expectations two years ahead rose to 3.9% in the second quarter, complicating the Reserve Bank's 3% target.
- Standard Chartered economist Razia Khan said the data "seal the case for July tightening," though PSG Financial Services economist Johann Els argued the Reserve Bank could opt to stand pat.
- The Reserve Bank will announce its interest rate decision on Thursday; Governor Lesetja Kganyago faces pressure to adjust policy, with market participants anticipating a lift to 7.25%.
23 Articles
23 Articles
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South African Inflation Jumps on Eve of Interest Rate Verdict
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