(Updates with economist’s comment in third paragraph.)
Sept. 21 (Bloomberg) -- South Africa’s inflation rate was unchanged at 5.3 percent in August, lower than economists had forecast, adding to expectations the central bank will keep its benchmark rate at a 30-year low tomorrow.
Prices rose 0.2 percent from a month earlier, the Pretoria- based statistics office said on its website today. The median estimate of 20 economists in a Bloomberg survey was for inflation to accelerate to 5.5 percent.
The Reserve Bank will probably hold the benchmark lending rate at 5.5 percent tomorrow, according to 18 of the 19 economists surveyed by Bloomberg, as a weakening economic recovery outweighs concerns about price pressures. Growth in Africa’s biggest economy slowed to an annualized 1.3 percent in the second quarter as manufacturing and mining output plunged, the statistics office said on Aug. 30.
“Price pressures have been muted in the past month,” Elize Kruger, an economist at KADD Capital in Johannesburg, said in a telephone interview today. “There will be some relief in the pressure on CPI and the outlook is now slightly lower than expected. The Reserve Bank would rather be conservative tomorrow.”
Food prices increased 0.3 percent on a monthly basis, less than forecast, Kruger said. Gasoline prices increased 1.7 percent on Aug. 3, while the price of white corn, a staple in South Africa, jumped 18 percent last month on the South African Futures Exchange.
Inflation is “expected to resume its upward trend in the coming months,” Nedbank Group Ltd., the country’s fourth- largest lender, said in e-mailed comments. “The earlier surge in global oil and fuel prices and a weaker rand will slowly filter through to consumer prices.”
The central bank has forecast inflation, which it aims to keep within a range of 3 percent to 6 percent, will probably average 5.1 percent this year and 6 percent in 2012.
The rand weakened 1 percent to 7.7895 against the dollar at 11:20 a.m. in Johannesburg. The currency has plunged 15 percent this year, the worst performer of the 16 major currencies tracked by Bloomberg.
Central bank Governor Gill Marcus is scheduled to announce the rate decision at 3 p.m. local time tomorrow.
--With assistance from Franz Wild and Simbarashe Gumbo in Johannesburg. Editors: Nasreen Seria, Gordon Bell
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