Fin24

Dip in inflation seen, meat prices worry

2012-11-19 08:33

Johannesburg - Inflation is set to moderate slightly in October although the rising cost of meat could push food prices higher, a Reuters poll found on Friday.

The survey of 19 economists suggested inflation retreated to 5.4% in October from 5.5%. The consumer price index is expected to have risen 0.4%, less than the 0.9% rise seen in September.

"Monthly food price (rises) will be lower this year than last, equally we see core inflation remaining under control," said Peter Attard Montalto, economist at Nomura International, referring to the inflation rate stripped of volatile food and fuel prices.

In September, headline inflation at 5.5% came in higher than the 5.2% forecast, mainly due to higher food and fuel prices.

"We expect CPI for October 2012 to retreat slightly from September," said Elna Moolman, economist at Renaissance Capital. "But we note the forecast risk around this number is reasonably high, mainly because of notoriously volatile food prices."

The Deaprtment of Energy said the retail petrol price would rise by about 8.4% a litre in September - partly to finance wage increases for petrol station employees - and then by nearly 2% in October due to the weaker rand.

The rand has lost more than 10% against the dollar on the back of mining labour unrest and wildcat strikes that spread to other sectors.

According to the latest Reuters Econometer, inflation is expected to average this year at 5.59%.

All 22 economists polled by Reuters on Friday said the Reserve Bank's Monetary Policy Committee (MPC) would leave rates unchanged at 40-year lows at the meeting ending next Thursday.

Statistics South Africa is due to release consumer inflation on Wednesday.

Comments
  • africanwolf - 2012-11-19 08:48

    Soon we will see meat only on TV as it becomes too expensive to buy the reason to this is everything else increases (electricity, fuel, levies, etc..) but salaries stay the same.

  • TheSingingHorse - 2012-11-19 08:58

    Like the crime statistics and Nkandlagate..hard to believe ...

  • Daniel Jayson Brink - 2012-11-19 09:24

    Ever notice how food prices go up and up when inflation or fuel prices rise, yet as soon as fuel prices drop or inflation lowers, the food price stays exactly the same? Thank goodness for pap, marog, madumbis, affal and runaways, how else would we survive!

  • Andrew Marriott - 2012-11-19 09:44

    Petrol price increased due to increases in petrol attendants wages increases? so if we stop using petrol attendants like the rest of the world will we see an 8% decrease in petrol?

  • 1971brad - 2012-11-19 11:52

    Could News 24 rather stick to inflation in South Africa. The above article was surely not from South Africa

  • jeremy002 - 2012-11-19 12:54

    Every year as the end of the year and the Christmas holidays approach, without fail, there is this rise in the meat price. Forgive the cynical public if they suspect that it is "organised". 'Course it is.

  • jacques.ackermann - 2012-11-20 14:23

    the real issue is the high taxes that we pay take singapore as a example. trying to overtax the middle class to feed the poor will not create a long term sustained model Singapore has a low tax rate(14.2% of GDP),stable prices and an open, probusiness environment. Its 2006 growth rate was 7.9% with an 2009 unemployment rate of 2.2%. Singapore became the fastest growing economy in the world(17.9%) in 2010. The Port of Singapore has the busiest port in the world--outstripping powerhouses like Rotterdam & Hong Kong. What's truly amazing? is that, unlike South africa, Singapore has few natural resources. Singapore & Hong Kong does not need China. It's the other way around

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