South Africa’s targeted CPIX inflation accelerated to 11,6% year-on-year in June from 10,9% in May, official data showed on Wednesday.
The all-items consumer price index (CPI) increased by an annual rate of 12,2%, compared to a previous 11,7%, Statistics South Africa said.
On a monthly basis, CPIX was at 1,1% in June while headline CPI increased by 1,3% month-on-month.
A Reuters poll forecast CPIX would jump to 11,3% year-on-year and slow to 0,9% month-on-month.
Colen Garrow, an economist at Brait, said the figure was higher than expected.
”I think the inflation numbers are not going to carry the same meaning as they did in the past until we get the new weightings and they are fully operational.
I’d be very surprised if it prompts another rate hike. The prudent stance would be to put things on hold until we can assess where the new weightings will take inflation.”
Jeff Gable, economist at Absa Capital, said: ”[The figure is] higher than expectations, and will spark a rally in the bond market and pretty much erase better inflation prospects for 2009.”
Doret Els, an economist at Efficient Group, said the figure was ”slightly” above their expectations.
”It shows that inflation pressures are still a real phenomenon in the economy. The number doesn’t bode well for interest rates, but we believe CPIX will peak in the third quarter of 2009 and subside thereafter. So an interest rate hike in August will have little or no impact on it.”
Carmen Altenkirch, economist at Nedbank, said: ”The figure is certainly higher than expected, but it should really not come as much of a surprise, with inflation expected to get worse over the next three months.
”The last time it was this high was September 2002 when it was 11,6% following the rand’s dramatic collapse in 2001. The good news is that inflation is probably reaching its peak, with both international oil and food prices falling over the past week or two.
”However, these prices have been volatile over the past few months and there’s always a chance that they
might rebound.” – Reuters, I-Net Bridge