There was some good news for consumers on Wednesday after Statistics South Africa announced that consumer inflation eased to 5.1% year-on-year for March compared to 5.7% year-on-year in February.
The figure was perfectly in line with what economists had expected and Stats SA that the average price increase was 0.8% month-on-month.
"Even though the data was better than expected, we do not expect this to translate into further easing in the repo rate," Standard Bank Economist Danelee van Dyk commented on the data.
"Aside from the [South African Reserve Bank] Governor Gill Marcus' recent comments implying stable interest rates, we believe that inflation expectations will have to drop by a considerable margin -- say a further 0,3 to 0,5 percentage points --before another rate cut will be reconsidered," she said.
"In a similar vein, second quarter economic data would have to disappoint to bring about the same decision," Van Dyk said.
Despite this drop, consumers are starting to bear the brunt of price hikes in electricity and petrol which will ultimately result in drastic prices surges for in food.
It is more important than ever for consumer to be money smart to avoid falling deeper down the rabbit hole of debt.
Inflation eases but consumers still struggle
29 Apr 2010
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