South African inflation probably slowed for the fourth consecutive month in December, adding to pressure on the central bank to accelerate interest rates cuts, Bloomberg reported.
The inflation rate fell to 10.6 percent from 12.1 percent in November, according to the median estimate of 20 economists surveyed by Bloomberg. The Pretoria-based statistics office will publish the data at 11:30 a.m. on Jan. 28.
The Reserve Bank lowered the benchmark repurchase rate by half a percentage point to 11.5 percent on Dec. 11, forecasting that the inflation rate will drop into its 3 percent to 6 percent target range in the third quarter. Declining oil prices, falling consumer spending and a slowing economy are helping keep price increases in check.
"We can see inflation coming into the target in the second quarter," said Johann Els, an economist at Old Mutual Investment Group in Cape Town. "The economy has been slowing faster than expected. There is a good case to be made for the Reserve Rank to consider" cutting interest rates by 1 percentage point in February and April.
The inflation rate is expected to fall further in January when the statistics agency begins using an overhauled consumer price index that reduces the weighting of food.
The statistic agency is due to publish producer-price inflation on Jan. 29. PPI probably eased to an annual 11.5 percent in December from 12.6 percent in the previous month, according to the median estimate of 14 economists surveyed by Bloomberg.