South Africa’s headline consumer price inflation slowed to 3.6% year-on-year in November, from 3.7% in October, data from Statistics South Africa showed on Wednesday.
The year-on-year CPI reading was the lowest since December 2010, when the rate was 3.5%, the statistics agency said.
On a month-on-month basis, price growth was 0.1%, versus 0.0% in the previous month.
Core inflation, which excludes prices of food, non-alcoholic beverages, petrol and energy, slowed to 3.9% year-on-year in November compared with 4% in October, while on a month-on-month basis was at 0.1%, the same as in the prior month.
Nedbank’s Group Economic Unit says inflation will start to rise from next month, as a significant decrease in fuel prices a year ago enters the base. “However, the outlook remains relatively benign due to exceptionally weak domestic demand conditions, which have limited exchange rate pass-through effects and other cost-push factors,” it adds.
The bank unit added that the Reserve Bank’s Monetary Policy Committee (MPC) has a window of opportunity to cut rates at its January meeting, but it may hesitate to do so owing to the proximity of the National Budget in February and decisions due from ratings agencies.
“We believe the MPC will leave interest rates unchanged for an extended period, but that there is a chance of some easing early in the new year.”