By Rivaldo Jantjies.
South Africa’s annual inflation unexpectedly softened in November, edging closer to the central bank’s new 3% target in a move that will encourage hopes for an interest-rate cut next month.
Consumer prices rose 3.5% compared with 3.6% a month earlier, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday. Only four of 11 economists expected a slowdown. Prices fell 0.1% in the month, against forecasts for no change.
The outcome is another dose of good news for the South African Reserve Bank after inflation expectations two years ahead — a key guide for policy — fell to a record 3.7% in the fourth quarter, moving closer to its 3% target and strengthening the case for a rate cut on January 29.
Finance Minister Enoch Godongwana announced the formal shift to the lower target last month.