SA APRIL CPI: Inflation cools slightly, but still remains stubbornly high.
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GUEST - Casey Sprake, Investment Analyst – Fixed Income, Anchor Capital
For the second consecutive month, headline inflation, as measured by the Consumer Price Index (CPI), softened – declining to 5.2% YoY in April from 5.3% YoY in March. The headline inflation rate has held its ground between 5% and 6% since September 2023. Core inflation (excluding the more volatile price categories of food, fuel, and electricity) dropped to 4.6% YoY from 4.9% YoY in March.
This softening of core inflation was unsurprising, given the subdued demand in the economy, the low exchange rate passthrough, and the relatively minor spillovers from elevated fuel and electricity prices. This latest print means that inflation has moved closer to the 4.5% midpoint of the SA Reserve Bank's (SARB’s) target band of 3% to 6%, where it prefers to anchor expectations.
For the second consecutive month, headline inflation, as measured by the Consumer Price Index (CPI), softened – declining to 5.2% YoY in April from 5.3% YoY in March. The headline inflation rate has held its ground between 5% and 6% since September 2023. Core inflation (excluding the more volatile price categories of food, fuel, and electricity) dropped to 4.6% YoY from 4.9% YoY in March.
This softening of core inflation was unsurprising, given the subdued demand in the economy, the low exchange rate passthrough, and the relatively minor spillovers from elevated fuel and electricity prices. This latest print means that inflation has moved closer to the 4.5% midpoint of the SA Reserve Bank's (SARB’s) target band of 3% to 6%, where it prefers to anchor expectations.