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S.Africa inflation eases to 6.2 percent in April

Xinhua, May 18, 2016 Adjust font size:

South Africa's consumer inflation (CPI) eased to 6.2 percent in April from 6.3 percent in March and is expected to lead the South Africa Reserve Bank (SARB) to keep interest rates on hold on Thursday.

Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, was at 5.5 percent from 5.4 percent in the previous month, according to South Africa stats figures released on Wednesday.

The SARB has so far raised rates by a cumulative 75 basis points this year to tame the stubborn inflation, which has breached the targeted three to six percent band.

Experts interviewed by Xinhua believe that the country is not yet out of the problem, but have welcomed the slow down.

"The inflation has slowed down but the country is not yet out of the woods, and we expect a rise in the coming months because we are seeing food inflation starting to grow a lot of legs," Citibank South Africa economist Gina Schoeman told Xinhua.

Between January and February this year consumer prices increased by 1.4 percent, putting South Africans in a difficult financial position.

The CPI has been hovering around seven percent after being up by 0.8 percent in January.

The data showed that food and non-alcoholic drinks increased by 1.1 percent in January to 1.3 percent in February.

An independent economist, Lesiba Mothata, urged consumers to tighten their belts.

"The pace of inflation acceleration is a great concern to all of us. We do expect it to go up again. Unfortunately, it is not something that has been priced into markets. Inflation is expected to rise because of bond yields which have remained weaker as the rand losses to the major currencies," she said. Enditem