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South Africa inflation jumps more than expected in June
Consumer prices rose 5% in June, above economists’ forecasts, as traders nearly fully priced in a quarter-point rate increase.
- On Wednesday, Pretoria-based Statistics South Africa reported annual consumer inflation accelerated to 5.0% in June, exceeding the median economist forecast of 4.7%.
- Transport costs drove the acceleration, as fuel prices climbed 34.3% in the 12 months to June, with Stats SA reporting diesel rose 50.8% and petrol increased 31.7%.
- Traders are pricing in a 25 basis point rate hike for Thursday, while average inflation expectations two years ahead rose to 3.9% in the second quarter, complicating the Reserve Bank's 3% target.
- Standard Chartered economist Razia Khan said the data "seal the case for July tightening," though PSG Financial Services economist Johann Els argued the Reserve Bank could opt to stand pat.
- The Reserve Bank will announce its interest rate decision on Thursday; Governor Lesetja Kganyago faces pressure to adjust policy, with market participants anticipating a lift to 7.25%.
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Inflation in South Africa, Nigeria increasingly diverging
Living costs in sub-Saharan Africa’s two largest economies are moving in opposite directions, with Nigeria’s consumer price increases cooling off while South Africa’s inflation rate jumped to levels last seen two years ago.Nigeria’s central bank kept its policy rate unchanged this week, forecasting inflation to remain at moderate levels in the medium term after it softened to 15.9% in June: David Omojomolo, analyst at Capital Economics, said he …
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Total News Sources32
Leaning Left4Leaning Right2Center12Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 22%
C 67%
11%
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