South African inflation cools for first time in five months

By Sfundo Parakozov

JOHANNESBURG, Aug 19 (Reuters) - ‌South Africa's ​inflation ​rate slowed for the first time in five months in July, partly due to a steep ‌drop in fuel costs, but analysts said it ⁠could soon climb again as renewed U.S.-Iran hostilities had since driven ‌global oil prices higher.

• Headline ‌inflation in Africa's largest economy eased to 4.3% year-on-year, lower than the 4.5% predicted by economists polled by ​Reuters and June's 5.0% reading, Statistics South Africa data showed on Wednesday.

• The agency attributed the slowdown to ⁠three main factors: softer food inflation, lower municipal tariff increases and a decline ​in fuel prices.

• Food and non-alcoholic beverage inflation fell to its lowest level in more than ​16 years, reaching 0.9% in ‌annual terms, largely due to cereals and meat.

• Municipalities implement tariff increases in July each ⁠year, and most categories saw smaller increases than in 2025.

• Petrol prices decreased by 7.1% and diesel by 11.7% between June ⁠and July, pulling the annual rate for fuel down to 20.6% ​from 34.3% in June.

• Inflation remains above the central bank's 3% target.

• August's inflation reading comes out on the same day as the ‌bank's next monetary policy announcement on September 23.

• The central bank surprised investors and ‌economists by keeping rates unchanged in July, saying its policy ⁠was restrictive enough to ‌return inflation to its ​target within two years.

(Reporting by Sfundo Parakozov;Additional reporting by Anathi Madubela;Editing by Alexander Winning and Andrew ‌Heavens)

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