By Lehlohonolo Lehana.

The consumer price inflation rate has dropped to 4.7% for the month of July, making it the lowest it has been in two years.

According to Stats SA, annual consumer price inflation (CPI) dropped from 5.4% in June to 4.7% in July.

This is the lowest reading since the 4.6% in July 2021.

Inflation is now close to the midpoint South African Reserve Bank’s inflation target range of 3% to 6%.

The MPC last month paused its longest phase of monetary tightening since 2006, leaving its policy benchmark at 8.25%. It raised rates in its 10 prior meetings, to bring cumulative increases to 475 basis points since November 2021.

The slowdown was mainly driven by a decline in the transport component of inflation, which fell 2.6% from a year ago — including a 16.8% drop in fuel prices — which dragged the category into negative territory for the first time since January 2021.

Food and non-alcoholic beverage inflation cooled to 9.9%, compared with 11% in June, in further encouraging news for the central bank, which has highlighted double-digit food price gains as a concern.

Core inflation, which excludes the cost of food, non-alcoholic drinks, fuel and electricity, slowed to 4.7% from 5%.