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Investing.com -- South Africa’s headline inflation saw a slight increase, rising to 2.8% year-on-year (y/y), up from 2.7% y/y in March. Despite this increase, the inflation rate remains below the 3-6% target range set by the Reserve Bank. This is the second consecutive month that inflation has been at or below the lower bound of the target range.
The rise in inflation in April was entirely driven by a surge in food inflation, which jumped from 2.7% y/y in March to 4.0% y/y in April. This increase was partially offset by a drop in petrol inflation, which fell to 13.4% y/y due to lower oil prices.
Additionally, core inflation, which excludes volatile items such as food and energy, continued to decrease, reaching 3.0% y/y, the lowest since mid-2021.
The slight increase in headline inflation was in line with the London Stock Exchange Group (LON:LSEG) consensus, although it was slightly higher than predictions for unchanged inflation.
Today, the Treasury is expected to announce the budget, which could potentially include a lower inflation target. If this is the case, the South African Reserve Bank (SARB) may maintain its current policy stance for some time, rather than resuming the easing cycle.
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