Encouraging trends are evident in latest US, European inflation data
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US core PCE inflation for July, at 2.6% y/y, was welcomed because it shows inflation is under control, although it still above the US Federal Reserve’s target of 2%. In Europe, consumer inflation has moderated to 2.2% y/y, close to the European Central Bank’s target of 2%, which may prompt the bank to cut rates again before the end of the year.
SA’s producer inflation rate of 4.2% y/y for July reflected the second consecutive month-on-month decline. However, it suggests a lacklustre manufacturing sector, with no pricing power. South African government revenue for July has printed slightly behind budget, while expenditure is slightly ahead of budget. This is not a risk yet but, if the economy fails to gain momentum, there is a risk of a revenue shortfall in the February 2025 Budget.
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SA’s producer inflation rate of 4.2% y/y for July reflected the second consecutive month-on-month decline. However, it suggests a lacklustre manufacturing sector, with no pricing power. South African government revenue for July has printed slightly behind budget, while expenditure is slightly ahead of budget. This is not a risk yet but, if the economy fails to gain momentum, there is a risk of a revenue shortfall in the February 2025 Budget.
Click here to listen to the podcast
