SARB would be ‘hard-pressed’ to raise repo rate after July CPI – economist
Efficient Group chief economist Dawie Roodt says the easing of consumer inflation to a two-year low has come as a pleasant surprise.
Inflation eased to 4,7% in July, Stats SA announced on Wednesday.
"This came as a pleasant surprise. The Reserve Bank is targeting 4,5%, and we are very close to that. The Reserve Bank will be hard-pressed to increase the interest rate again,” said Roodt.
Patrick Kelly, the Chief Director for Price Statistics, said on Wednesday the CPI was the lowest reading since July 2021, when the rate was 4,6%.
"Previously a major upward driver of inflation, the transport category helped pull overall inflation down in July. Previously a major upward driver of inflation, the transport category helped pull overall inflation down in July."
But Roodt added a note of caution to indebted consumers, saying the inflation rate could start picking up again.
"With the inflation so low and very close to the midpoint of the target by the Reserve Bank, I think that the Reserve Bank is probably going to sit with their hands out.
"This is an excellent number, but I am a little concerned about inflation going forward because eventually, inflation will start picking up again. But in the meantime, I am very pleased with the number."
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