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S. Africa inflation drops to four-year low

Published on 18/03/2015

South Africa's annual inflation rate hit a four-year low of 3.9 percent in February, figures showed Wednesday, though analysts predicted an imminent rise in consumer prices.

The rate was 0.5 percentage points down on January’s figure and was the lowest since March 2011, due in part to low oil prices.

The drop was in line with economists’ predictions as declining fuel prices continued to filter through.

But the rate is expected to start rising “rapidly” propelled by “the weaker rand dollar exchange rate, rising oil prices and higher food prices stemming from a poor maize crop,” according to South Africa’s Nedbank.

The February figure falls within the central bank’s annual average inflation rate forecast for this year of between three and six percent.

Nedbank forecast that inflation would rise to near six percent by the end of the year.