South Africa's consumer inflation jumps to near seven-year high

23rd March 2016, Comments 0 comments

South Africa's consumer inflation accelerated 0.8 percentage points to 7.0 percent in February, its highest in nearly seven years, official data showed Wednesday.

The rise in the consumer price index (CPI) released by StatsSA was the largest since May 2009 when the rate was 8.0 percent.

A sharp fall in the rand currency and the worst drought in a century pushed food prices higher, taking the consumer price index up from January's annual rate of 6.2 percent.

The rise in the inflation rate has forced the central bank to increase interest rates twice in a row this year.

Last week the central bank hiked its benchmark repurchase rate by 25 basis points to 7.0 percent after an aggressive 50 basis points in January.

Inflation is increasing at the same time that growth is slowing, with the World Bank and the IMF predicting economic growth will drop to less than one percent this year.

Africa's most advanced economy is battling to avoid a credit downgrade in the face of slow growth and a weak currency.

© 2016 AFP

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