Rampant inflation hits new high

Johannesburg - The increase in South Africa's consumer price index excluding mortgage rate changes (CPIX) for metro and other areas, which is used by the South African Reserve Bank (SARB) for its inflation target, was up 13.0% year-on-year (y/y) in July from 11.6% y/y in June, Statistics South Africa (Stats SA) said on Wednesday.

CPIX was up 2.5% month-on-month (m/m) after it increased 1.1% m/m in June.

This is the sixteenth month running that CPIX has been above the 6% upper target limit. The previous all-time high before June this year for CPIX was the 11.3% set in 2002.

Headline consumer prices - the 12-month rate of change in the consumer price index (CPI) for metropolitan areas - was up 13.4% y/y in July from a 12.2% y/y increase in June.

The core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, was up 13.7% y/y in July from 12.0% y/y in June.

CPIX was expected at 12.9%, an I-Net Bridge survey found, with forecasts ranging from 11.2% to 13.5% and from just 6.5% a year ago.

Headline CPI was expected to have increased by a whopping 13.6% from just 7% a year ago.

Forecasts for CPI ranged from 12.1% to 14.1%.

Stats SA said the annual increase in the CPIX for the historical metropolitan and other urban areas was mainly due to relatively large annual contributions in the price indices for food (+5.1 percentage points), transport (3.2 percentage points), fuel and power (1.1), housing (0.9), household operation (0.7), medical care (0.6), education (0.4) and personal care (0.3).

The increase in the CPI for the historical metropolitan areas was mainly due to relatively large annual contributions in the price indices for food (+4.3 percentage points), transport (3.5), housing (2.3), fuel and power (0.8), housing operation (0.6) medical care (0.6), and education (0.4).

Annual CPIX for 2007 was at 6.5% from the 4.6% in 2006, while annual CPI was at 7.1% from the 4.7% in 2006.

- I-Net Bridge