Inflation - 'SA needs to know'

He was responding to criticism levelled at IAM by SA Reserve Bank governor Tito Mboweni during an interview with radio station 702 on Thursday.

During the interview, Mboweni said he was "very concerned" about the approach Investec had taken with regard to questioning Statistics SA's consumer price inflation (CPI) data.

Earlier this week, IAM said that a two-year delay by Stats SA to implement the CPI's rebasing and reweighting had resulted in inflated data.

"Calculations by Investec Asset Management have shown that the real inflation rate in the economy is probably far lower than the official inflation number," Roux said in a statement.

The May inflation rate of 10.9% had been overstated by 2.2 percentage points, he added.

Roux told Sapa on Friday that not long after Stats SA completed its income and expenditure survey, analyst Mike Biggs had written a report that also reached the conclusion that CPI was over-inflated by just over two percentage points.

Biggs subsequently wrote two more reports backing the conclusion.

"Stats SA had appraised the reports written by Biggs - the agency was familiar with the situation," Roux said.

"There were constant exchanges with Stats SA and the Reserve Bank. I engage on a regular basis with Stats SA, the Treasury and the central bank, as all economists do," he said.

"Before IAM went public with the report, I spoke to officials at the Reserve Bank," Roux added.

He said IAM had concluded that there had been no public understanding of the CPI weights and therefore it had to be brought to public attention "because the current high official number is feeding into future inflation - this warranted a public discussion," Roux said.

- Sapa