South Africa's performance came amid political and economic turbulence. Tensions within the Government of National Unity (GNU) intensified after the confirmation in early April of the planned VAT increase, scheduled for 1 May. This triggered friction between the ANC and DA, with the market pricing in the GNU’s potential collapse. South African government bonds sold off sharply, pushing the 10-year yield above 11% - a level not seen since last July. However, sentiment improved after the finance minister reversed the VAT increase, which was seen as reaffirming the government’s commitment to fiscal stability. A revised budget is now expected on 21 May. SA’s annual consumer inflation slowed to 2.7% y/y in March from 3.2% y/y in February, largely due to lower fuel prices and a moderation in education costs.