South Africa’s inflation rate has declined to the lowest figure for the first time in four years, the best number the country has posed since the Covid outbreak.
The country’s statistics agency in a data released today said falling oil prices and declining food inflation spurred the drop as inflation fell from 3.8% to 2.8%. The government-regulated fuel and diesel prices fell by more than a rand in October 2024, leading further to a reduction in the Consumer Price Index.
The headline inflation for October has been the lowest the country has seen since June 2020 when there was harsh lockdown measures that affected businesses and spiked the price of goods and services.
The drop in inflation will be a huge relief for Cyril Ramaphosa following his party’s poor performance at the elections for the first time since 1994. Prior to the election, there had been growing anger and frustration over the state of the economy, debt profile, unemployment and high crime rate, all of which culminated in the ANC’s poor showing at the polls. In fact, the ANC had to form a coalition in order to survive the political hurricane.
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Also, with the decline in inflation, South African monetary policy committee is expected to cut the interest rate by 25 basis points. This will reduce the cost of borrowing and boost access to capital for small businesses in the country.
