Hope for Kenya as S. African inflation slows slightly as fuel prices drop

Inflation in South Africa slowed slightly in August as fuel prices dropped, but it remained near a 13-year record high, official data showed on Wednesday.

Hundreds of South Africans marched to the seat of government in the capital Pretoria last month to demand action against power cuts and the rising cost of food and fuel.

Inflation soared to 7.8 percent in July.

While petrol and diesel prices pulled annual inflation down to 7.6 percent last month, food prices continued to raise, according to the national statistics agency, StatsSA.

The August reading is the lowest since January, said StatsSA said in a statement. 

“The welcome decrease in the cost of fuel had an impact on the overall transport index, which declined by 1.0 percent between July and August,” the agency said. 

But the price of corn flour, a staple for most South Africans, surged to 29.1 percent in August, while prices for bread and cereals also accelerated to 17.8 percent.

In a bid to stabilize inflation, the country’s central bank in July hiked its key interest rate by 75 basis points to 5.5 percent, the highest increase in 10 years.

The bank is due to announce a new rate on Thursday with economists forecasting another 75-basis-point increase.

Inflation began to rise as countries emerged from COVID pandemic lockdowns and it shot higher after Russia’s war in Ukraine sent global energy and food prices soaring.

The report gives hopes to Kenyan amid high cost fuel recently.