Steady inflation could finally lead to repo rate cut
Updated | By Mmangaliso Khumalo
The latest consumer inflation figures have once again raised hopes of a repo rate cut in the not-too-distant future.
Annual consumer price inflation remained unchanged at 5.2% in May, Statistics South Africa said on Wednesday.
This comes after inflation eased to 5.2% in April from 5.3% in March and 5.6% in February.
Higher rates were recorded for transport, alcoholic beverages and tobacco, and recreation and culture.
After five consecutive months of decline, food and non-alcoholic beverages inflation remained steady at 4.7-percent in May.
Bread and cereals continued to trend downward to its lowest annual inflation rate since February 2022.
Head of macro-economic research at Standard Bank, Dr Elna Moolman, said the unchanged inflation rate will, in itself, provide relief for consumers.
“In due course, if we are right that consumer inflation should generally continue to drift sideways and be around the mid-point of the target range towards the fourth quarter of this year, then they should provide scope for the Reserve Bank to cut interest rates later this year which would provide further relief to consumers.”
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