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BL Premium reports that consumer inflation accelerated slightly to an annual rate of 3% in December from 2.9% a month earlier, reinforcing expectations of a 25 basis point interest rate cut at the Reserve Bank’s Monetary Policy Committee (MPC) meeting next week.
Month-on-month inflation as measured by the consumer price index (CPI) accelerated by 0.1%, reflecting mild upward pressure in the final month of the year. The numbers were better than expected as economists had forecast an increase of between 3.1% and 3.2% year-on-year and a monthly rise of 0.2% to 0.3%. Wednesday’s data from Stats SA highlighted persistent pressures from housing and food costs, though the overall rate is at the bottom of the Bank’s 3%-6% target range. Annual inflation for food and nonalcoholic beverages stood at 2.5%, while the annual inflation rate for housing and utilities was 4.4% reflecting the upward trend in rentals and utility services. Investec chief economist Annabel Bishop commented. “With CPI well below the midpoint of the inflation target of 4.5% year-on-year, and likely to remain so for the rest of this year and most of the first half of next year, the MPC is still expected to trim interest rates this month, by 25 basis points.”
- Read the full original of the report in the above regard by Jana Marx at BusinessLive (subscriber access only)
- Read too, SA inflation rate remains favourable despite fuel price hikes, at The Citizen
Get other news reports at the SA Labour News home page