SA data shows inflation slowed in March

Inflation slowed marginally more than expected in March, reaching its lowest level since December, data released by Stats SA showed on Wednesday

Annual consumer price inflation (CPI) was 4.1% in March, down from 4.6% in February, according to the agency. On a month-on-month basis, inflation came in at 0.3% in March, down from 1% in February. Market expectations saw it coming in at 4.2%.

The release comes as the SA Reserve Bank has already dramatically cut interest rates in recent weeks — slashing the repo rate by 200 basis points to 4.25%, its lowest level since 1998.

This has injected an estimated R80bn into the economy as it fights to survive the coronavirus pandemic and the strict economic lockdown to contain its spread.

March’s figure takes inflation back below the 4.5% midpoint of the Bank’s target range of 3% to 6%. The Bank, however, expects inflation to decline further to average 3.6% this year.

This follows the substantial monetary policy interventions to combat the economic crisis, and with President Cyril Ramaphosa’s announcement on Tuesday of a R500bn fiscal package to help bolster businesses and households, equivalent to roughly 10% of GDP.

According to Stats SA, March’s data was collected before the Covid-19 lockdown on March 27. The agency warned that the lockdown regulations, which are in effect until the beginning of May, are likely to complicate the production of CPI data for the month of April.

The lockdown has restricted the goods and services consumers can buy — and prevented Stats SA data collectors from visiting stores, the agency said.

“Where possible, prices are being collected in April from the online presence of stores already in the CPI sample,” it said. “Indices of products not available for purchase during this period will be imputed.”  

Stats SA said that specific details related to the April CPI would be communicated closer to the date of its release. —  BusinessLIVE