South Africa’s consumer price index (CPI) eased to 4.1 percent in September from its August 2019 rate of 4.3%, according to official data released on Wednesday.
Statistics South Africa (Stats SA) attributed the marginal drop in consumer inflation to declines in the cost of food, housing and utilities as well as miscellaneous goods and services.
Consultancy firm Econometrix’s economist Laura Campbell said the drop in the inflation rate should encourage the South African Reserve Bank (SARB) to reduce interest rates.
“The fact that the CPI inflation came in lower than expected mainly increases cause for the reserve bank to cut interest rates further in the short term,” Campbell said.
She however noted that the SARB had limited space to manoeuvre, given “the fiscal situation domestically and the potential upheaval globally which the current trade tensions could bring about.”
Her comments came in the wake of uncertainty caused by the ongoing trade tensions between the United States and China.
NM/jn/APA