• Voter paralysis

    With so much tilting voters against change, democratic reason is the loser, says Solly Moeng.

  • The power of perseverance

    True grit is a reliable predictor of who will achieve success in life, says Ian Mann.

  • It's the system

    The system sucks and it’s being used far too often as an excuse, says Mandi Smallhorne.

All data is delayed
Loading...
See More

Consumer inflation edges up to 6.3%

Feb 22 2012 10:37
Reuters
Johannesburg - South Africa’s targeted consumer price inflation (CPI) quickened to 6.3% year-on-year (y/y) in January, from 6.1% in December, Statistics South Africa said on Wednesday.

On a month-on-month basis, inflation was at 0.6% from 0.2% in December. Economists surveyed by Reuters had expected CPI to inch up to 6.2% y/y and be at 0.5% month-on-month.

Gina Schoeman, senior economist at Absa Capital, said the figure wasn't that surprising.

“We think through 2012 we are going to continue to see food prices rising. Very importantly is that core inflation is now gaining momentum, it moved from 3.9 to 4.3%.

"That’s important because we’ve seen strong consumption over the last two years and it’s not unusual for that to start relating to higher underlying inflation in the economy, and I think today marks the start of that."

She said the South African Reserve Bank (Sarb) is likely to be "mindful of global growth risks" and if inflation continued to go up, it may raise interest rates in the fourth quarter.

Inflation breached the central bank’s 3-6% target in November and has been outside its target band since.

Sarb expects inflation to remain outside the target band throughout 2012, peaking at 6.6% in the second quarter, and move back to within the band in the first quarter of 2013.

Inflation was being driven mainly by cost-push pressures such as food, fuel and administered prices. Marcus said raising interest rates “at this stage would not be appropriate” given the lack of demand pressures.

The bank left the repo rate unchanged at 5.5% in January, after cutting rates by 650 basis points between end-2008 and end-2010 to 30-year lows. Its next meeting is in March.
sarb  |  interest rates  |  inflation  |  sa economy  |  cpi

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about:

THE DEBT ISSUE

Debt is one of the biggest financial issues facing South Africans today. Find out how you can avoid and manage your debt with Fin24 and Debt Rescue.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Would you take out a payday loan?

Previous results · Suggest a vote

Loading...