- Like Nigeria, South Africa’s Inflation Rises
Consumer prices in South Africa, Africa’s second largest economy, rose to a seven-month high in January as fuel price rises.
Consumer Price Index, which measures inflation rate, increased from 4 percent in December to 4.5 percent in January, according to Pretoria-based Statistics South Africa report released on Wednesday.
The report stated that inflation was driven largely by the increase in fuel price during the month under review as price of gasoline rose by 15 percent when compared to the same month of 2019.
However, annual core inflation, excluding fuel, prices of food, non-alcoholic drinks and electricity, slowed to 3.7 percent.
Bloomberg experts explained that “The increase is unlikely to put pressure on the central bank to pursue tight monetary policy as it sees the rate averaging 4.7% this year, before stabilizing at 4.5% from the third quarter of 2021. The monetary policy committee reduced its benchmark interest rate to the lowest level in four years in January and its quarterly projection model implies another cut of 25 basis points in fourth quarter of the year.”
Meanwhile, Nigeria’s inflation rose to 21 months high in the same month to hit 12.13 percent from 11.98 percent. The two Africa’s largest economies continue to struggle with rising prices, a situation that has forced the International Monetary Fund to lower Nigeria’s growth projection from 2.5 percent previously projected to 2 percent in 2020.