Annual inflation in South Africa in June fell to 5.4%, down from 6.3% in May.
This is also the first time in more than a year that inflation is within the Reserve Bank’s target of between three and six percent.
According to Stats SA, this is the lowest rate of inflation in twenty months.
The lower inflation rate was helped by smaller increases in the costs of food and fuel. In June annual inflation for transport had been 1.8%, compared to the 7% measured in May. The annual cost of food grew by 11% in June, lower than the 14% recorded in May.
The lower inflation rate could mean that the Reserve Bank may not continue to hike interest rates as aggressively as it has been doing in recent months, with current interest rates at 15-year highs.
[Image: Gerd Altmann from Pixabay]