SA’s latest CPI print holds out hopes of a second-half rate cut

SA’s April inflation data surprised on the downside: it was up 0.3% for the month vs market expectations for 0.4%. As a result, the annual inflation rate has moderated to 5.2%, with core inflation at 4.6%. Food inflation has slowed over the past three months and is now at 4.4% y/y – a year ago it was at 14%. The main contributors to inflation are administered prices, including electricity at +15%, which are outside the control of monetary policy. This makes it increasingly likely that the SARB will begin interest rate cuts in the second half of the year.
Click here to listen to the podcast.