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Cape Town – The annual consumer price inflation (CPI) reduced to 6.1% in March 2017 from 6.3% in February 2017, Statistics South Africa announced on Wednesday.
The consumer price index increased by 0.6% month-on-month in March 2017.
The South African economy was in good shape in March, with the rand strengthening to R12.43 to the dollar after three months of gains against the greenback.
However, President Jacob Zuma's Cabinet reshuffle on 31 March saw the rand lose these gains overnight and also resulted in rating agencies S&P and Fitch downgrading the country's sovereign rating to non-investment grade.
As a consequence, economists do not see the economy continuing its strong trajectory in 2017. They believe the petrol price will be hiked in May, the rand will deteriorate further (it has surprised analysts so far with its strength) and that inflation and interest rates will rise.
READ: Pain at the pumps on cards for motorists
At 10:20, the rand had not changed much after news of the March inflation figures and was trading at R13.36 to the dollar.
StatsSA's other findings were:
- In March, the CPI for goods increased by 7.0% year-on-year (down from 7.1% in February), and the CPI for services increased by 5.4% year-on-year (down from 5.6% in February).
- Food and non-alcoholic beverages decreased from 1.7 percentage points in February to 1.5 percentage points in March. The index increased by 8.7% year-on-year.
- Transport increased from 1.0 percentage point in February to 1.1 percentage points in March. The index increased by 7.7% year-on-year.
- Education increased from 0.1 of a percentage point in February to 0.2 of a percentage point in March. The index increased by 7.0% year-on-year.
- Miscellaneous goods and services increased from 1.1 percentage points in February to 1.2 percentage points in March. The index increased by 7.5% year-on-year.
- Food and non-alcoholic beverages decreased from 1.7 percentage points in February to 1.5 percentage points in March. The index increased by 8.7% year-on-year.
- Transport increased from 1.0 percentage point in February to 1.1 percentage points in March. The index increased by 7.7% year-on-year.
- Education increased from 0.1 of a percentage point in February to 0.2 of a percentage point in March. The index increased by 7.0% year-on-year.
- Miscellaneous goods and services increased from 1.1 percentage points in February to 1.2 percentage points in March. The index increased by 7.5% year-on-year.
