South Africa’s inflation climbs to 4.5 percent
South Africa's annual inflation rate accelerated by half a percentage point to 4.5 percent in April, official figures showed Wednesday, as the effect of low oil prices started to fade.
Inflation in Africa’s most advanced economy reached its trough in February when it hit a four-year low of 3.9 percent on the back of low oil prices.
Nedbank says the rate was now on an “upward trend” that will see it end the year at slightly below the central bank’s six percent upper target range.
“The increase will be mainly on the back of a weaker rand-dollar exchange rate as well as higher oil prices,” said Nedbank, one of South Africa’s largest lenders.
First National Bank’s economist John Loos said that “the resumption of a rise in CPI (consumer price index) inflation begins to raise the risk of interest rate hiking.”
The central bank unveils its quarterly interest rate decision on Thursday, but analysts predict rates will be kept on hold given weak domestic economic growth.
Africa’s second largest economy has kept its benchmark interest rate unchanged at 5.75 percent since July last year.