According to SARB forecasts, inflation is expected to average 6,6 per cent in 2016 and 6,0 per cent in 2017, compared with forecasts of 6,7 per cent and 6,2 per cent at the MPC meeting in May.
The expected peak, at 7,1 per cent in the fourth quarter of 2016, has been revised slightly down from 7,3 per cent due in part to lower administered price inflation (mainly petrol prices). An encouraging development is the moderation in the forecast for core inflation, from an average of 5,8 per cent in 2016 to 5,3 per cent by 2018.