Emphasis on ownership under new B-BBEE Commissionby SORIA HAY

Consumer inflation slowed in February, as food inflation moderated, but remained outside the Reserve Bank’s 3%-6% target range.

The consumer price index (CPI) rose 6.3% in February compared with a year earlier, Statistics SA said on Wednesday.

That compares with 6.6% in January.

Food inflation, which was expected to fall back into single digits after running rampant last year as a result of a severe drought across SA, met those expectations by a whisker. Food and nonalcoholic beverages inflation came in at 9.9% year on year in February — but inflation for food alone was 10%.

NKC Economics senior economist Elize Kruger had expected food inflation of 6.3%.

Food was one of the main drivers of high consumer inflation last year — CPI growth was outside the Reserve Bank’s 3%-6% target range in for most of the year — but economists agree that the factors pushing up inflation last year will improve this year.

Nonetheless, Finance Minister Pravin Gordhan’s budget statement last month forecast CPI inflation to remain outside the target for the year, at 6.4%, and fall back within range only next year.

The Reserve Bank’s forecast at its last monetary policy meeting was for CPI inflation to average 6.2% this year.

The Bank has held interest rates steady since March 2016, despite high inflation, as economic growth was sluggish and the Bank was confident inflation would not accelerate much further.

Compared with a month earlier, CPI rose 1.1% in February, Stats SA said on Wednesday.