South Africa’s consumer inflation for June 2015 was at 4.7 percent, up 0.1 percent on the May figure of 4. 6 percent, Statistics South Africa (Stats SA) said on Wednesday.

Inflation
Inflation

The figures were in line with consensus forecasts, Laura Campbell, a senior economist at Econometric, said.

The acceleration in the inflation represents the policy of the South African Reserve Bank (SARB): to increase the repurchase rate or leave it unchanged at 5. 75 percent.

The bank increased its rate in January last year by 50 basis points and in July by 25 basis points. The bank will announce the repo rate on Thursday.

“Commodity prices, especially of agricultural food items and crude oil, have declined significantly over the past six to nine months. This is also likely to have contributed towards declining inflationary pressures,” said Elize Kruger, an economist at KADD Capital.

“The SARB will likely be cognisant of the fine balance between high inflation and low growth,” the Nedbank said in a note to clients.
Stats SA said the food and non-alcoholic beverages index decreased by 0.3 percent between May 2015 and June 2015. The annual rate decreased to 4.3 percent in June 2015 from 4.7 percent in May 2015.

Inflation was unlikely to remain within the three to six percent inflation target range for the foreseeable future, Anna Mary of Kunzi Investment said.

She expects inflation to reach seven percent by the year end. Enditem

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