Johannesburg - South Africa’s targeted consumer inflation
quickened slightly more than expected to 5.3% year-on-year (y/y) in July from 5.0% in
June, Statistics South Africa said on Wednesday.
Stats SA said the consumer price index rose to 0.9%
month-on-month from 0.4% in June.
Inflation is at its highest since February 2010, with food
the main driver of the rise.
Food inflation, which has helped drive inflation higher from
a five-year low of 3.2% hit in September, quickened to 7.4% y/y from 7.1%
previously.
Stanlib chief economist Kevin Lings said the figure was
high.
"The monthly number is high and it does raise the prospect
of inflation going over 6%. My number is now for it to go over 6.5% early next year.
"While I see the sentiment around cutting rates, I am not in
that camp. The global situation can allow them to keep rates on hold, but I
don't think that a cut would be optimal at this stage while inflation is
heading towards 7%."
Colen Garrow, economist at Brait, said the figure was
unlikely to make any difference to growing calls in the market for a rate
cut.
"I think it is going to be a question of timing and it's
probably going to be, I hope, sooner rather than later because the winds of a
contagion coming around have nothing to do with inflation.
"Inflation will sort
itself out, but the gross domestic product growth is going to be more
important."
Inflation has been inside the central bank's target of
between 3% and 6% since February 2010, although it has risen since its September low.
The central bank has left the repo rate unchanged at 5.5%
this year, after cutting rates by 650 basis points between end-2008 and
end-2010 to 30-year lows.
Reserve Bank governor Gill Marcus hinted on Tuesday that the
bank might be willing to cut interest rates again, should there be a marked
slowdown in the global economy.
The bank expects inflation to briefly pierce its target and
peak at 6.3% in the first quarter of 2012.
Marcus also said although inflation was ticking up, it was
largely benign when the effects of administered prices were stripped out.