South African inflation slowed to 4.6 percent in August, easing pressure on the Reserve Bank to raise interest rates for a second time this year.
The inflation rate fell from 5 percent in July, the Pretoria-based statistics office said on its website on Wednesday. The median estimate of 27 economists surveyed by Bloomberg was 4.8 percent. Prices were unchanged in the month.
Africa’s second-largest economy contracted for the first time in more than a year in the three months through June as electricity blackouts and falling global demand and metal prices weighed on output. The central bank, which will announce its rate decision later on Wednesday, raised its benchmark repurchase rate in July for the first time in a year as it forecast inflation will exceed the 3 percent to 6 percent target band in the first half of next year.
The Reserve Bank “is likely to highlight that the recent falls in domestic fuel prices, thanks to lower Brent crude-oil prices, should help provide some near-term relief for consumer prices,” Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said in an a-mailed note to clients before the data was released.
Twenty-nine of 31 economists surveyed by Bloomberg forecast the Reserve Bank will keep its benchmark repurchase rate unchanged at 6 percent on Wednesday, with two predicting a 25 basis-point increase.
Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, slowed to 5.3 percent in July from 5.4 percent in the previous month.