Pretoria - The Consumer Price Index (CPI) eased to 4.6 percent in May 2010 - the lowest since May 2006, reported Statistics South Africa (Stats SA) on Wednesday.
May's figure was 0.2 percent lower than the corresponding annual rate of 4.8 percent recorded in April.
Stats SA said the food and non-alcoholic beverages index increased by 0.5 percent between April and May 2010. Between April and May the transport index increased by 0.3 percent mainly due to 14 cents/litre increase in the price of petrol.
The news comes as no surprise to analysts. Nedbank economist Carmen Altenkirch said downward pressure on inflation came from lower food prices and the moderation in goods inflation.
"Double-digit administered price inflation remains the main driver of headline inflation.
"The inflation cycle is forecast to turn in the second half of the year as Eskom's 25 percent tariff hike comes into effect and some degree of opportunistic pricing surfaces as consumer spending picks up slightly.
"Although we still expect interest rates to remain on hold well into 2011, the MPC may surprise by easing further in July, given the near-term improvement in inflation and inflation expectations, particularly if growth figures start to disappoint," she said.
Standard Bank had expected CPI to come in at 4.5 percent year-on-year.
