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
likely weaken.
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
recovery.