South Africa CPI flat at 4.9% in September ahead of #MTBPS

South Africa’s headline consumer inflation was flat at 4.9 percent year-on-year in September, data from Statistics South Africa showed. File Image: IOL

South Africa’s headline consumer inflation was flat at 4.9 percent year-on-year in September, data from Statistics South Africa showed. File Image: IOL

Published Oct 24, 2018

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JOHANNESBURG - South Africa’s headline consumer inflation was flat at 4.9 percent year-on-year in September, data from Statistics South Africa showed on Wednesday.

On a month-on-month basis, inflation quickened to 0.5 percent in September after contracting by 0.1 percent in August.

Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, was unchanged at 4.2 percent year-on-year in September.

On a month-on-month basis core inflation was at 0.5 percent in September from 0.0 percent previously. 

#MTBPS

The rand was little changed early on Wednesday, as investor caution reigned ahead of a closely watched budget speech by the country’s finance minister, Tito Mboweni.

At 10:00 local time, the rand traded at 14.24 versus the dollar, the rand closed of 14.2625 on Tuesday.

Minister Mboweni is expected to announce revised budget deficit targets and growth forecasts, as well as measures to boost the economy and shore up struggling state-owned companies.

The tone of his medium-term budget speech will influence whether Moody’s strips South Africa of its last investment grade credit rating at a review expected after the speech.

“South Africa’s new finance minister will probably announce further fiscal tightening,” John Ashbourne at Capital Economics said in a note.

“This will likely placate ratings agencies, but supports our view that economic growth will remain weak.”

Government bonds were slightly stronger in early deals, with the yield on the benchmark instrument due in 2026 down 4 basis points to 9.125 percent.

BUSINESS REPORT ONLINE/REUTERS

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