South Africa's inflation quickened in August

Highlights

• South Africa’s inflation rate climbed in line with analysts’ expectations of higher water and electricity prices, providing impetus for the central bank to keep interest rates high for longer.
• The headline consumer-price index for August rose 4.8% from a year earlier, compared to 4.7% the prior month, per data from Pretoria-based Statistics South Africa. 
• That matched the median estimate of 23 economists in a Bloomberg survey and marks a reversal after slowing to the lowest level in two years in the previous month.

Source: Bloomberg

Our Takeaway

We’ve covered inflation movements across different African economies more frequently in the last few weeks. But what is inflation and why does it matter? Put simply, inflation is the rate at which prices for goods and services increase across an economy. The rate at which prices change can have ramifications across the economy, affecting businesses and consumers alike. For instance, when high levels of inflation occur, the value of one’s money (also known as purchasing power) erodes, as consumers are no longer able to buy as many products with the same amount of money, ultimately affecting businesses that produce and sell to them.