South Africa’s inflation rate rose modestly in November, coming in at 2.9% year-on-year, slightly up from 2.8% in October, but still remaining just below the South African Reserve Bank’s target range. Month-on-month inflation was stable at 0.0%, compared to a slight decline of -0.1% in October, according to data from Statistics South Africa.
Economists had predicted a higher inflation rate of 3.1% for the year. The Reserve Bank’s target range for inflation is between 3% and 6%, with an aim to keep it near the midpoint of this range.
Food inflation, which has been a significant driver of price increases in recent months, slowed considerably, falling to its lowest level in nearly 14 years. Inflation for food and non-alcoholic beverages dropped to 2.3% year-on-year, down from 3.6% in October, marking the lowest rate since December 2010.
Despite this, analysts like Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics, expect inflation to gradually rise in the coming months but remain contained and below 4.5%. Tuvey also indicated that a further interest rate cut of 50 basis points could be considered at the central bank’s next meeting in January following a recent series of rate reductions.
