South Africa: Inflation falls to lowest level since December 2023 in April
Inflation edged down to 5.2% in April from March’s 5.3%. April’s reading marked the lowest inflation rate since December 2023 and undershot market expectations of stable inflation. Looking at the details of the release, the moderation was primarily driven by slower growth in prices for housing and utilities. In addition, price pressures for food and non-alcoholic beverages moderated.
Accordingly, the trend pointed down mildly, with annual average inflation coming in at 5.4% in April (March: 5.5%). Meanwhile, core inflation fell to 4.6% in April, from the previous month’s 4.9%.
Finally, consumer prices increased 0.26% from the previous month in April, coming in below March’s 0.79% increase. April’s result marked the weakest reading since January.
Inflation has remained within the South African Reserve Bank (SARB)’s 3.0–6.0% target range since June 2023; that said, it has also remained above the mid-point of the band. Our Consensus is for inflation to remain around current levels in the coming months and to hover around 4.5% in Q4. Overall in 2024, inflation will slow from 2023 but remain above the midpoint of the SARB’s range.