S.African inflation edges up ahead of rate decision

South Africa’s annual inflation rate rose slightly to 4.7 percent in June, official data showed Wednesday, ahead of a central bank decision that could see interest rates increase for the first time in a year.

The 0.1 percent rise in inflation from the previous month was largely driven by the housing and utilities sectors.

Nedbank, one of the country’s largest lenders, said the 4.7 percent figure was lower than market expectations of 5.0 percent.

It predicted inflation would “continue its upward trend this year” — citing higher food prices and a weaker rand dollar exchange rate.

The Reserve Bank’s target range is between 3.0 and 6.0 percent.

The latest inflation figures came ahead of the Reserve Bank’s monetary policy decision on Thursday.

Analysts are split on whether the bank will hike the current 5.75 percent rate by 25 basis points as it balances the need to boost economic growth with keeping inflation under control.

Africa’s second biggest economy is experiencing sluggish growth, hampered by crippling electricity supply shortages and high unemployment.

The International Monetary Fund in June projected growth of 2.0 percent in 2015-2016, up from 1.5 percent the previous year.