Annual consumer inflation for May eased to 2.1 percent, the lowest reading recorded since September 2004.
By comparison, inflation in April registered at 3 percent according to Stats SA.
“If we are correct, this print will register as the lowest year-on-year change since September 2004,” FNB economists said in their weekly economic outlook ahead of the announcement, with a fall in petrol prices helping to push down May’s print.
Transport prices decreased 8,4 percent in May, while food and non-alcoholic beverages prices increased by 4.4 percent. Housing and utilities prices increased by 4.5 percent.
With inflation contained, the Reserve Bank may consider again cutting interest rates at its meeting next week in an effort to stimulate consumption. The Reserve Bank has already cut interest rates by 275 basis points this year, in response to the impact of Covid-19 on the SA economy. — Fin24.com.