By Tannur Anders
JOHANNESBURG (Reuters) -South Africa’s inflation rate rose less than expected in November, staying just below the central bank’s target range thanks to food inflation slowing to its lowest level in almost 14 years.
Headline consumer inflation was 2.9% year on year in November from 2.8% in October. In month-on-month terms, inflation was at 0.0% in November, compared with -0.1% in October, Statistics South Africa data showed.
Economists polled by Reuters had forecast headline inflation would accelerate to 3.1% in annual terms. The South African Reserve Bank targets inflation of between 3% and 6%, aiming for the midpoint of that band.
“We expect inflation will continue to edge higher over the coming months. But it is likely to remain contained and stay below the 4.5% target midpoint,” Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said.
The central bank last month cut its main lending rate by 25 basis points (bps) for the second meeting in a row, after inflation dropped below the target range in October for the first time in years.
Tuvey said a 50-bps cut was not out of the question at the central bank’s next policy meeting in January.
Food and non-alcoholic beverages inflation slowed to 2.3% year on year in November from 3.6% one month earlier, the lowest rate of price increases for that category since December 2010, the statistics agency said.
But a month-on-month increase in fuel prices pushed the November headline inflation figure higher in annual terms.
Annual core inflation, which excludes food and fuel prices, also came in below expectations at 3.7% in November compared with 3.9% one month earlier.
