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Johannesburg - Consumer inflation increased 3.5% year-on-year (y/y) in December, Statistics South Africa said on Wednesday. The figure was in line with expectations.
It was 3.6% y/y in November.
The consumer price index (CPI) is used by the Reserve Bank for its inflation target. The target band is 3% to 6%.
CPI was at an unchanged 0.2% month-on-month (m/m).
It was expected at 3.5% y/y, according to a survey of leading economists by I-Net Bridge, with forecasts among the 12 economists ranging from 3.4% to 3.8%.
CPI registered 4.3% in 2010 from 7.1% in 2009.
Analysts said the Reserve Bank was likely to keep interest rates on hold.
Gina Schoeman, economist at Absa Capital, said it was in line with expectations.
"Even though we saw the slight slowdown in December, we maintain that inflation in 2011 will be slightly up. The Reserve Bank will still choose to keep the repo rate on hold at tomorrow's meeting."
Ayodele Akambi, economist at Pan African Capital, said the data was well within the Reserve Bank’s target band.
"The 3.5% CPI still reflects excess capacity in the economy. We also do believe that given the lower overall figure of 4.3% in 2010, the inflation will average 5.5% in 2011, well within the Sarb target band, despite the administered prices."
It was 3.6% y/y in November.
The consumer price index (CPI) is used by the Reserve Bank for its inflation target. The target band is 3% to 6%.
CPI was at an unchanged 0.2% month-on-month (m/m).
It was expected at 3.5% y/y, according to a survey of leading economists by I-Net Bridge, with forecasts among the 12 economists ranging from 3.4% to 3.8%.
CPI registered 4.3% in 2010 from 7.1% in 2009.
Analysts said the Reserve Bank was likely to keep interest rates on hold.
Gina Schoeman, economist at Absa Capital, said it was in line with expectations.
"Even though we saw the slight slowdown in December, we maintain that inflation in 2011 will be slightly up. The Reserve Bank will still choose to keep the repo rate on hold at tomorrow's meeting."
Ayodele Akambi, economist at Pan African Capital, said the data was well within the Reserve Bank’s target band.
"The 3.5% CPI still reflects excess capacity in the economy. We also do believe that given the lower overall figure of 4.3% in 2010, the inflation will average 5.5% in 2011, well within the Sarb target band, despite the administered prices."
