South African inflation steady at 5.3%

South African inflation held steady at 5.3 percent in August, staying near the top of the government’s target band as the Reserve Bank meets this week on interest rates.

South Africa’s 12-month inflation target is three to six percent, putting the bank in a tricky position as it tries to bolster the economy against a global downturn without triggering high inflation.

Food prices — a key concern in a country with 25.7 percent unemployment — were running higher than overall inflation, at 7.3 percent against 7.4 percent in July.

The Reserve Bank’s monetary policy committee will announce Thursday its decision on interest rates, with the benchmark rate at a 30-year low of 5.5 percent since November.

Fears have been mounting that the gloomy global economic picture will slow South Africa’s recovery from a 2009 recession — the first for Africa’s largest economy since the end of apartheid in 1994.

South Africa’s economy grew 1.3 percent in the second quarter, slowing sharply from 4.5 percent in the first three months of the year.