Lower inflation improves outlook
29 August 2017
Inflation declined to below 5% for the first time since November 2015. The consumer price index rose by 4.6% in July compared to a year ago, while the comparative figure for June was 5.1% (in January it was 6.6%). Food inflation of 6.8% remains the main contributor to the overall inflation rate, but this too has declined from double-digit rates at the start of the year, and should continue trending lower. Traded maize prices are currently around R2 000 per tonne, about R1 500 lower than a year ago. Global maize prices are also under pressure. Meat prices remain the outlier. Meat inflation has accelerated to 14% as farmers have been rebuilding herds after last year’s drought, reducing supply.