South Africa inflation hits seven-year low
South Africa's inflation rate has fallen to a seven-year low, official statistics showed Wednesday, as food prices were tempered by improved rainfall with the easing of a national drought.
Consumer price inflation slowed to 3.8 percent year-on-year in March from 4.0 percent in February -- within the 3.0 to 6.0 percent range targeted by the central bank. Drought continues to affect agricultural production in many areas of South Africa, but the threat of severe shortages forcing Cape Town to turn off its taps within weeks has receded. The central bank in March cut its benchmark lending rate by a quarter percentage point to 6.5 percent, the lowest level in two years. But inflation is likely to rise after the VAT was increased to 15 percent in the first budget under new President Cyril Ramaphosa. The rand currency has strengthened nearly 10 percent against the dollar since Ramaphosa took over the ruling ANC party in December. He then replaced Jacob Zuma as president in February. South Africa's economy is predicted to grow at 1.4 percent this year, according to the World Bank. Ramaphosa has vowed to boost growth and tackle record unemployment by attracting investment and cracking down on government corruption. bgs/gd DM