In welcome news for South African consumers, Stats SA announced on Wednesday that the inflation rate has decreased from 4.4% in August to 3.8% in September.
This substantial dip, the lowest level since March 2021, has had trade unions and investment analysts alike expressing optimism for the country’s economic outlook.
Abigail Moyo, spokesperson for the trade union UASA, said that the lower inflation rate is a positive sign and ignites expectations that the South African Reserve Bank's (SARB) Monetary Policy Committee may implement a further 25 basis points cut in interest rates during their November meeting.
The significant reduction in consumer price inflation (CPI) this September marks a milestone as it is the first time that the inflation rate has fallen below 4% since 2021. Notably, the decrease in CPI is well below the SARB’s target of 4.5%.
According to Stats SA, the primary contributors to this positive shift include housing and utilities, miscellaneous goods and services, food and non-alcoholic beverages, as well as alcoholic beverages and tobacco.
Moyo said that Transport was the only negative contributor. “For heavily indebted workers, a cut in the repo rate will bring some relief ahead of the Festive Season after a few difficult years.”
Casey Sprake, Investment Analyst at Anchor Capital said that in positive news for South African (SA) consumers, September's inflation, as measured by the Consumer Price Index (CPI).
Core inflation, which excludes volatile food and energy prices and reflects underlying inflation pressures, was unchanged from August at 4.1% year on year in September, indicating continued easing in price pressures.”
The Mercury