South Africa Records Lowest Consumer Inflation Rate since 2020
It marks the lowest inflation rate since June 2020, the Stats SA said.
Patrick Kelly, chief director for price statistics at Stats SA, cited the decline in petrol or gasoline and diesel prices as the major contributing factors behind the cooling inflation.
"Petrol and diesel prices declined by 5.3 percent between September and October, taking the annual rate for fuel to minus 19.1 percent. The price for inland 95-octane petrol in October was 21.05 rands (about 1.16 U.S. dollars) per liter, the cheapest since February 2022," Kelly noted.
Kelly said the overall transport index, aggregating road, rail, air, and sea transport data, decreased 5.3 percent year-on-year, pulling overall inflation down by 0.8 percentage points.
South African consumers have been under immense pressure over the past three years due to rising inflation. A report released by the South African Reserve Bank, the central bank, showed that the country's inflation was the fourth highest among G20 countries in 2023.
Jannie Rossouw, an economist at Wits University, told Xinhua in a telephone interview that the consistent decline in inflation reflects effective monetary policy.
Rossouw highlighted the role of the rand-dollar exchange rate and Brent crude oil prices in the recent drop in petrol prices. "The declining inflation rate shows that the monetary policy followed by the Reserve Bank works. The slowing inflation would impact the bank's decision, but they would also consider inflation expectations."
After remaining steady over the past few months in the 4.5-4.7 percent range, the annual inflation for food and non-alcoholic beverages dropped to 3.6 percent in October, the lowest since November 2019.
Between September and October, the bread and cereal price index declined 0.5 percent, with annual inflation for these products down to 4.6 percent. A variety of bread and cereal products were cheaper in October compared to September, Kelly added.
The South African Reserve Bank cut the repurchase rate by 25 basis points in September, marking the first decrease after nine consecutive hikes. Another rate cut is expected from the bank's upcoming meeting.
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