Johannesburg - A median of 16 economists polled by Reuters
is for South African consumer inflation to quicken to 5.2% year-on-year (y/y)
in July from 5% in June.
The month-on-month consumer price index (CPI) is seen
quickening to 0.8% in July from 0.4% in June.
Consumer inflation rose to its highest level in 15 months in
June to 5% from 4.6% in May, with food inflation being the main driver of the
increase in overall CPI. Food inflation rose to 7.1% y/y from 6.1% in May.
The Reserve Bank has indicated that it would not raise
interest rates due to cost-push pressures only, and the slow-paced economic
recovery remains a concern. Most economists expect the bank not to raise rates
before next year as a result.
The South African Reserve Bank has kept the key repo rate at
30-year lows at four consecutive policy meetings.
Upward pressure for CPI is expected to stem from
administered prices, such as electricity and municipal rates.
Higher-than-expected CPI could suggest the central bank may
move a bit sooner on rates, and so the rand could rally while bonds would
A lower-than-expected inflation figure would allow the
Reserve Bank to hold rates for longer, and perhaps open the possibility of
further monetary loosening in an effort to stimulate the sluggish economic