South Africa’s inflation rate dropped to 4.1% – the lowest so far this year – in March, Statistics South Africa (SSA) has just announced. Due to the falling oil price and the restriction, inflation is expected to fall even further in the future.
The figures still reflect the “normal” economy as figures were collected before the country was left locked and locked on March 27. This comes after inflation for the first time in 15 months rose to 4.6% – above the Reserve Bank’s target range – for the first time in 15 months.
The trolley of food and non-alcoholic beverages measured by SSA was 4.2% more expensive in March than a year ago. Among basic foods, fruit (7.1%), fish (5.3%) and meat (5%) in particular affected food price inflation.
Core inflation – a key benchmark that excludes food, fuel and power – dropped slightly, from 3.8% to 3.7%.
Provincial inflation ranged from 3.6% in Limpopo to 4.8% in the Western Cape.
The elderly experience inflation of approximately 4.1% and the poorest 10% of households 4.7%.
SSA warns that due to the restriction, it will struggle to do April’s figures. Not only are shops not allowed to sell non-essential products or provide services, many merchants are also on the move. This makes it impossible to measure all prices. So many indexes will be omitted when these figures are released next month.
Many economists expect the Reserve Bank to lower the interest rate again at the end of May because of the dampened inflation and recession. The general expectation is that it will be reduced by 50 basis points and not again by 100 basis points – as in March and April. It was also reduced by 25 basis points in January.