South African inflation slowed for the first time in five months to 5.6 percent in May after gasoline prices fell the most since July.
The inflation rate dropped from 5.9 percent in April, Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 19 economists was 5.8 percent. Consumer prices decreased 0.3 percent in the month.
The “fall in petrol prices in the month of May will have directly shaved 0.3 percentage points off the CPI inflation print,” Absa Capital Ltd. said in an e-mailed note before the release of the data. “May is a month in which many goods and services are not sampled, so there is less capacity for an inflation surprise.”
South Africa’s gasoline prices in Gauteng, the nation’s commercial hub, fell on May 1 by 5.5 percent, the biggest drop since July, after oil declined. Inflation is forecast to average 5.8 percent this year, down from a previous estimate of 5.9 percent, and exceed the bank’s 3 percent to 6 percent target in the third quarter, South African Reserve Bank Governor Gill Marcus said on May 23.
The combination of high inflation and low economic growth are leaving the central bank “limited room for maneuver,” Marcus said on June 6. The bank has kept the benchmark lending rate at 5 percent since July last year.
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