August 19, 2026/Coronation Report
Summary
Headline inflation eased to 15.43% y/y in July 2026, below our forecast of 15.80% y/y and lower than 15.91% y/y recorded in June, representing a 48bps decline and marking the second consecutive month of disinflation. On a month-on-month basis, inflation moderated slightly to 1.57%, compared to our forecast of 1.90% and June’s 1.66%.
While our forecast was close in magnitude, the underlying drivers differed from our expectations. We had anticipated that the late-July PMS price adjustment would accelerate transport and services inflation and result in firmer core inflation. Instead, transport inflation moderated to 0.27% m/m from 0.77% m/m in June, energy prices declined by 2.39% m/m, and core inflation slowed sharply to 0.15% m/m from 1.66% m/m.
This suggests that the pass-through from recent fuel price adjustments was weaker and slower than expected, as underlying demand-side inflation pressures continued to ease.
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