Lower inflation won’t lead to immediate rate cut, predicts economist

Lower inflation won’t lead to immediate rate cut, predicts economist

The slight downtick in annual inflation is a positive sign but it won't prompt a rate rate cut anytime soon. 

Interest rate could rise further despite easing of inflation, warns economist
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So says economist, Azar Jammine, who's been commenting on consumer inflation's decline for the second month in a row. 


“The fact is the inflation is very high and at the same time internationally that is also the case. There has been reluctant on the part of the leadiing central banks around the world to pick up the interest rates too soon, because inflation in those countries is not coming down as sharply as stated and even domestically. 


“The Reserve Bank keeps talking about targeting the 4.5% midpoint to the 3 to 6% inflation target."


On Wednesday, Stats SA reported that CPI cooled from 5.3% in March to April's 5.2%. 


READ: CPI eases for second consecutive month


Jammine says the decrease wasn't expected. 


“We've had drought conditions in some of the countries for a number of months and people have been expecting prices to increase as a consequence, instead that has not happened. 


“We see the effects of last year's bird flu fall away, we seen a very low rate increase in meat prices and also internationally, prices of food have been falling and that has filtered into lower increases in the prices of oils, fats and wheats."

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