South Africa: Inflation rises in September
Inflation increased to a three-month high of 5.4% in September from August’s 4.8%. Despite the uptick, inflation remained within the 3.0–6.0% target band of the South African Reserve Bank (SARB) and was largely in line with analysts’ expectations.
Looking at the details of the release, the acceleration in headline inflation chiefly reflected transportation prices rising year on year in September after dropping in the previous month. Moreover, price pressures for food and non-alcoholic beverages picked up.
Still, the trend pointed down, with annual average inflation falling to 6.4% in September (August: 6.5%). Meanwhile, core inflation fell to 4.5% in September from the previous month’s 4.8%.
Finally, consumer prices rose 0.63% over the previous month in September, accelerating from the 0.27% increase seen in August.
September’s data suggests the SARB could once again extend the pause in its monetary policy tightening cycle when it convenes next on 23 November; despite headline inflation picking up and moving closer to the upper bound of the target range, underlying inflation moderated to a 13-month low. Our panelists do not see rate cuts until Q1 2024.