Slight drop in CPI

Statistics South Africa released the figures in Pretoria on Wednesday.

StatsSA on Wednesday announced an unexpected 0.1 percent drop in year-on-year inflation.

JOHANNESBURG - Statistics South Africa (StatsSA) on Wednesday released the Consumer Price Index (CPI) for the month of June, indicating an unexpected 0.1 percent drop compared to May's figure of 5.5 percent.

The CPI, as a measurement of year-on-year inflation, indicates that consumers are spending only 5.5 percent more on goods this year, on average, than in July 2012.

Economists are expecting the CPI to rise again in July, mainly due to the seven percent hike in the petrol price.

The South African Reserve Bank has set an inflation target of between 3 and 6 percent, which has been maintained so far this year.

Earlier in July, the bank announced that the repo rate would remain unchanged at 5 percent, keeping interest at a steady four-decade low.

Governor Gill Marcus said she was deeply worried about the state of the economy and slow economic growth.

Analysts widely expected rates to remain unchanged.