The inflation rate has dropped for the first time this year, according to Stats SA.
Annual consumer price inflation (CPI) was recorded at 5.3% in March, compared to 5.6% in February.
According to Stats SA, the decline was driven primarily by a slowing-down in the cost of food and non-alcoholic beverages. In March the cost of these rose by 5.1%, compared to 6.1% in February.
Month-on-month inflation was 0.8%.
Despite the decline in inflation, it is still higher than the 4.5% midpoint of the Reserve Bank’s inflation target of between three and six percent.
The decrease in inflation is good news for consumers, as it also means that interest rates could start coming down.
Most economists believe that the Reserve Bank will start cutting interest rates towards the end of the year, although risks remain. For example, if the conflict in the Middle East escalates, this could impact external inflationary factors, while if a populist coalition comes to power after next month’s South African election, this could also be damaging for South Africa’s inflation outlook.