SANISHA PACKIRISAMY, ECONOMIST AT MOMENTUM
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Headline inflation dropped to 4.4% in April 2019, beating expectations for a steady outcome of 4.5%. Core inflation dropped in line with the IRESS consensus to 4.1% from 4.4% previously.
• More than three quarters of the items in the consumer inflation basket recorded inflation below 6% in April 2019, confirming a lack of widespread inflationary pressure.
• Meat prices continued to deflate at the producer price level, while the rise in crop inflation slowed in the latest reading for March 2019.
• A small cut in the fuel price is expected for June 2019, with the current over-recovery amounting to 6c/l.
• Services inflation fell to its lowest level in seven years.
• Administered price inflation remained outside of the 3% to 6% inflation target and rose to 8.3% in April 2019.
• Notwithstanding a continuous string of downside surprises in inflation and disappointing growth outcomes, the South African Reserve Bank (Sarb) noted the need for further confirmation of a sustained downward trajectory in inflation expectations, closer to the midpoint of the target range. As such, Momentum Investments expects interest rates to remain steady at the upcoming interest-rate setting meeting.
• More than three quarters of the items in the consumer inflation basket recorded inflation below 6% in April 2019, confirming a lack of widespread inflationary pressure.
• Meat prices continued to deflate at the producer price level, while the rise in crop inflation slowed in the latest reading for March 2019.
• A small cut in the fuel price is expected for June 2019, with the current over-recovery amounting to 6c/l.
• Services inflation fell to its lowest level in seven years.
• Administered price inflation remained outside of the 3% to 6% inflation target and rose to 8.3% in April 2019.
• Notwithstanding a continuous string of downside surprises in inflation and disappointing growth outcomes, the South African Reserve Bank (Sarb) noted the need for further confirmation of a sustained downward trajectory in inflation expectations, closer to the midpoint of the target range. As such, Momentum Investments expects interest rates to remain steady at the upcoming interest-rate setting meeting.
