South Africa’s Consumer Price Inflation (CPI) rose to 4% in December 2019 after a record 3.6 % low in November 2019, Statistics South Africa (Stats SA) said on Wednesday.
Although this is a slight increase from November, Stats SA data shows a 0.5% decrease when compared to the same period in 2018.
The 4.0% index for December 2019 shows a slight increase when compared to the same period at the beginning of the decade when CPI was sitting at 3.5%, the agency said.
The release of the CPI comes on the back of the South African Reserve Bank’s Monetary Policy Committee recent decision to cut the repo rate by 25 basis points.
The decision was largely seen by many sectors as a way of providing a stimulus to the struggling economy, this as the SARB Governor Lesetja Kganyago announced that the committee had lowered its inflation forecasts significantly.
The SARB cited weak economic growth as the reason why inflation remained under control, and painted a grim picture on the outlook for economic growth, lowering its predictions for this year and next to 1.2% and 1.6%, respectively.
The forecast for inflation was now seen at 4.7% in 2020 and 4.6% in 2021, compared to the previous forecast of 5.1% and 4.7% respectively, the apex bank said.
Inflation, as measured by the annual change in CPI, is the key measure used by the Reserve Bank’s monetary policy committee to set interest rates.
NM/GIK/APA