The economic and consumer indicators released in July reflect some improvement compared to June. Vehicle sales recovered to 31 867 units sold in June 2020 (-30.6% y-y). The ABSA PMI gained another 3.7 points in June to 53.9 points. Nominal food and beverage sales fell by -87.9% y-y in May following the equally hefty -94.4% y-y drop experienced in April. CPI inflation gained 10bps to 2.2% y-y in June, while PPI inflation for May and June 2020 was 0.4% and 0.5% y-y respectively. The SARB’s -25bps repo rate cut to 3.5% in-part reflected its low inflation expectations.
Modest increases in fuel are expected in August 2020, with coastal petrol and diesel prices increasing by 11c/litre and 50c/litre to R14.53/litre and R12.93/litre, respectively. Annual fuel savings of -4.9% y-y are expected in August. The rand strengthened by 1.9% m-m to R17.03/USD at the end of July, and remained weak on a y-y basis (-15.8% y-y).