Consumer price inflation fell to as low as 2.1% year on year in May, down from 4.6% three months earlier. Longerterm inflation expectations have continued to decline towards 4.5%, which is the midpoint of the inflation target range. Inflation expectations for 2020 are at around 3.9%, the lowest in recorded history.
Consequently, the SARB’s inflation forecast now sees core inflation remaining within the lower half of the target range for the remainder of the forecast period, that is until the end of 2022. The SARB expects headline inflation to average 3.4% in 2020, and 4.3% in both 2021 and 2022.