World Economy

S. Africa Inflation Falls

S. Africa Inflation FallsS. Africa Inflation Falls

South Africa inflation, as measured by the consumer price index, declined to 6.1% in May from 6.2% in April, according to data released by Statistics South Africa, Xinhua reported. Many economists had expected the consumer price index to edge up to about 6.3%. Although the inflation has eased, it is still above the South Africa Reserve Bank’s target of 3% to 6%. The decline in inflation has led the SARB to hold the repurchase rate at 7% on July 21. “We expect food prices to remain at higher levels, at least until mid-2017, assuming that there will be favorable weather conditions in the 2016/17 production year to replenish market supplies. There are indications that the current El Nino is transiting to La Nina,” Wandile Sihlobo, an economist told Xinhua. He added that agricultural commodity prices are still at higher levels on the back of tight supplies caused by the El Nino induced drought.