• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

See More

Inflation edges up in December

Jan 23 2013 10:35 Reuters

Related Articles

PPI remains unchanged

PPI quickens to 5.2% in October

Inflation steady at 5.6%

October inflation quickens to 5.6%

Dip in inflation seen, meat prices worry

Sarb sounds inflation warning


Johannesburg - Consumer prices in South Africa edged higher in December, posing a headache for the country's central bank as it meets to discuss efforts to kick-start the economy.

Statistics South Africa reported that the consumer price index increased 5.7% from the level a year ago, higher than the 5.6% rate seen in November.

Prices for food, housing and transport all rose, further pressuring hard-hit South Africans.

The data comes as the South African Reserve Bank huddles to discuss what they can do to turn lacklustre growth into something more likely to address sky-high unemployment.

But the increase in inflation gives the bank a little less wiggle room to juice the economy through a cut in interest rates.

A rate cut could cause further price rises and edge the country closer toward a toxic mix of high prices and low growth known as stagflation.

In the third quarter of 2012 the South African economy grew at a measly 1.2%.

The central bank's decision is expected on Thursday.

Annabel Bishop, group economist at Investec said: "The mild rise in the CPI on the month was due to price pressure coming from the housing and utilities component as the rising cost of living in South Africa due to higher administered prices ranging from double digit electricity and water tariff increases and higher rates and taxes pushed up the CPI.

"We continue to believe that the Reserve Bank will leave interest rates unchanged this week, as recent weakness in economic growth was due to the strike action and not a broad based slowdown.

"CPI inflation has risen but the next reading will be impacted by the rebasing and re-weighting exercise that will generate a new CPI from 2013."

The rand firmed slightly R8.8879 against the dollar at 08:17 GMT from R8.89 before the data was released at 08:00 GMT.

The yield on the 2026 benchmark bond nudged higher to 7.275% from 7.265% prior to the data.

Statistics South Africa has changed the weightings in its consumer price index basket to give a slightly lower weighting to food, while petrol and electricity weightings will rise.

The new weights will apply from January 2013.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.




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
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Top 10 richest musicians of all time

Check out the gallery to find out who they are!


Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

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

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote