Inflation Drops to Lowest Level in 13 Months As Food and Fuel Costs Decrease, Prices Still Incredibly High

• South Africa's inflation rate has eased to its lowest level in over a year thanks to decreasing food and fuel prices
• Even though food the price of food and non-alcoholic beverages have dropped, costs remain relatively high
• South Africans have wondered if the easing inflation rate will affect the Reserve Bank's rate hikes

JOHANNESBURG - South African consumers are in for good news as the annual inflation rate has shown some easing.

Lower food and fuel prices have contributed to inflation dropping to 6.3% in May from April's rate of 6.8%, the lowest since April 2022.

While food inflation, the price of food and non-alcoholic beverages, eased from 13.95 to 11.8% in April and only increased by 0.3% in May, prices remain incredibly high, Mail & Guardian reported.

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Will easing inflation affect Reserve Bank's rate hikes?

Questions have arisen about wheater the improvement in SA's inflation rate will colour the South African Reserve Bank's monetary policy committee's (MPC) decision to either increase or decrease interest rates.

Relentless hikes from the MPC to keep inflation in control have seen the interest rates shoot up by 475 basis points. After the last MPC meeting, the Reserve Bank greenlit another hike of 50 basis points, News24 reported.

Speaking to Briefly News, Independent Economic Analyst Prof Bonke Dumisa predicted that the MPC would continue raising the repo rates as long as inflation remains higher than the target inflation rate range of 3-6%.

Prof Dumisa said:

"But, this will give us the moral edge to fight the MPC to at least keep the repo rate increase to no higher than 25 basis points."

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South Africans hope easing inflation will lead to decrease in interest rates

Below are some comments:

@Matrixdot said:

"Now we just need to inform the MPC to cool down with those interest rate hikes."

@Andza09 added:

"I have never seen the price of any food item go down."

@leboranks hoped:

"Smells like a reprieve to me."

@TPB275 commented

"Excellent news. Mr Governor will be kinder to us next time he takes to the podium."

@ComradeStina criticised:

"Watch the @SAReserveBank take credit for this and claim it's their non-stop rate hikes. Hopefully, they stop increasing interest rates."

@Raeez_S pleaded:

"Please, no more interest rate hikes."

R1 200 Woolies grocery haul has Mzansi amused, Lady clowned over shopping choices

Earlier, Briefly News reported that a content creator on TikTok showed how she spent over R1 000 on groceries for the week at Woolworth's store.

The lady's groceries inspired a debate about how much more people could buy at other stores, such as Pick n Pay.

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The video of Woolworth's grocery haul got 23 000 likes and hundreds of comments. With the rising cost of living in South Africa, the prices of different grocery stores are a hot topic, and people were not shy to pick favourites.

Source: Briefly News