Inflation stays at lower end of band
Johannesburg - South Africa’s targeted consumer inflation was at 3.7% year-on-year (y/y) in February, unchanged from January and in line with consensus, official data showed on Wednesday.
Statistics South Africa said the headline consumer price index (CPI) was at 0.7% month-on-month (m/m) from 0.4% in January.
Economists surveyed by Reuters predicted inflation at 3.7% y/y for February, while prices were seen rising 0.7% m/m.
Christie Viljoen, economist at NKC Independent Economists, said rising fuel costs were likely to influence inflation for a while.
“The big increases came from fuel prices going up which pushed public and private transport costs up and there was a big monthly climb in health costs, specfically the category for medical services, which affects most of us in the country," she said.
“The annualised number is still very low but the problem is with the fuel prices going up, which can have second- and third-round effects which will influence almost everything else going forward.”
Inflation hit a five-year low of 3.2% in September, but has since edged up slowly.
The Reserve Bank said at its last meeting in January it expected inflation to stay within its target band until the end of 2012, averaging 4.6% this year and 5.3% in 2012.
Many analysts expect the central bank to revise its inflation forecasts upwards, given high international oil and food prices.
Central bank governor Gill Marcus said last week rising oil and food prices were the main concern for the bank.
The monetary policy committee started its second policy meeting of the year on Tuesday and is largely expected to leave the repo rate unchanged at 5.5% when it announces its decision on Thursday.
The bank left rates unchanged in January, after cutting them by 650 basis points between December 2008 and December 2010.
With good news like this the monetary committee should be decreasing the repo rate.We need growth to decrease unemployment which will boost boost economy and increase fiscal collection from broadwer tax base.Drastic times need drastic measures SA needs assistance cut rates and help the poor!
It's obvious that all these so-called economists, starting with the Reserve Bank governor, don't do their groceries shopping, don't stop at petrol stations to fill up their car's tanks and definitely don't pay their municipal bils. Just for that they should be investigated.
In what country does these economists live and get their statistics from? How can inflation be so low, when everytime I go shopping for groceries, I get less and less for the same Rvalue? Petrol has gone up with MUCH more than 3,7%, according to an article in last week's finance24, we pay 46% more for electricity than this time last year, but inflation is so low? Or does petrol and electricity not get included in the calculation? Guess not, otherwise they'd have some explaining to do. We pay and the government collects. And then still lies that the economy is doing just fine. Democratic? No. Communism in the making? Definitely.
I understand how you feel. We're all feeling the fuel inflation, medical inflation, education inflation and food inflation. These commodities all increase at a much faster rate then what the actual SA inflation happens to be. To make matters worse employers increase your salary not with all the above inflation's but that of the inflation declared by SARB.
Inflation figure is calculated as an average from a price basket of goods not just the ones you have listed.
For PSquare, a basket of goods universaly accepted as a reliable sample was studied by the Sunday Times a few weeks ago and it concludes that inflation index is well above 35-40 per cent. The SARB index is nothing short of the lie of the century with grave implications to the nation.