Annual inflation for October came in at 3.7%, according to Statistics South Africa (Stats SA). This is the lowest since 2011.
Annual inflation in September was 4.1%. Overall inflation for the year to the end of October is 4.2%, below the 4.6% recorded for the same period in 2018.
Stats SA also provided a historical snapshot of South African inflation trends since 1950. Over this period, deflation (when prices drop compared to the same month a year earlier) occurred only once, in August 1954, when inflation was -0.3%.
The highest recorded rate of inflation was in January 1986, when the figure reached 20.7%. This was when South Africa was in the midst of a political and economic crisis, thanks to a mixture of domestic unrest and international pressure.
Post-1994, the highest inflation rate was recorded in August 2008, when annual inflation was 13.7%. The lowest inflation rate recorded in democratic South Africa was in January 2004, at 0.2%.
October’s rate of 3.7% is below the Reserve Bank’s target of 4.5%, but within its broader target band of between three and six percent.
Ordinarily, such a low inflation rate would have resulted in a rate cut, but, due to the stuttering performance of the South African economy, the Reserve Bank decided to keep interest rates at the same level. The repo rate remains at 6.5%, and the prime rate is also unchanged at 10.25%.