.jpg)
1 hour ago
3
Article content
(Bloomberg) — South African inflation expectations climbed in the second quarter, complicating the central bank’s efforts to anchor expectations around its 3% target.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
Average inflation expectations two years ahead — the measure the central bank closely watches when setting interest rates — rose to 3.9% from 3.6% previously, according to a survey published by the Stellenbosch-based Bureau for Economic Research on Tuesday.
Article content
Article content
Article content
“The global energy shock, due to the war between the US and Iran, had a negative impact on the inflation expectations of all four social groups,” it said.
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
The survey was conducted between May 18 and June 4, before the US and Iran agreed a 60-day ceasefire deal that reopened the Strait of Hormuz, sending global energy costs lower and triggering a steep decline in domestic fuel prices. That should result in domestic inflation easing in coming months.
Article content
Between survey rounds, annual inflation accelerated to 4.5% from 3% and gasoline prices hit a record. Against that backdrop, all three professional groups surveyed by the BER revised their inflation expectations higher across all forecast horizons, it said.
Article content
Among the three groups, analysts foresee the quickest return to the central bank’s 3% target; they expect inflation to subside to 3.5% by 2028, it said. Business people and labor unions are slightly more skeptical, anticipating 4% and 4.4% respectively, the BER said.
Article content
South African Reserve Bank Governor Lesetja Kganyago recently warned that policymakers would need to act on rising inflation expectations to prevent the impact of the oil shock from fanning broader price pressures.
Article content
Article content
“We now have inflation expectations, and expectations have drifted away from target,” he told broadcaster CNBC Africa. “And what we have seen is that all price setters are expecting inflation higher, and that is what the central bank has got to act on, reining in those expectations.”
Article content
Policymakers, who raised interest rates by 25 basis points to 7% at their last meeting, will deliver their next policy decision on July 23. Forward-rate agreements are pricing in 20 basis points of tightening at the next meeting, and another 25 basis points by January.
Article content
Sign up here for the daily Next Africa newsletter and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.
Article content
—With assistance from Robert Brand.
Article content
(Updates with more details in paragraph two and five)
Article content
English (US)