SARAH BULLEN, Johannesburg | Tuesday 5.00pm.
THE inflation rate — the annual rate of change in the Consumer Price Index — was 6,6% at July 1998, the latest figures from the Central Statistical Services released on Tuesday indicate.
This rate is 1,4 percentage points higher than the annual rate of 5,2% calculated in June, largely as result of an increase in mortgage and interest rates.
ING Barings chief economist Kristina Quattek said the CPI is “spot on” in terms of most estimates and forecasts, confirming that the rise in morgage rates and housing prices would push the CPI up.
The core inflation rate, which excludes fiscal and monetary policy impacts as well as volatile food prices, for metropolitan areas was 7,2% in July 1998. This shows a 0,2 percentage point fall from the corresponding rate of 7,4% in June 1998.
The monthly increase of 2,5% in the Consumer Price Index for metropolitan areas was due to increases in the price indices for housing, fuel and power.
Quattek said economists predict that the CPI will continue on an upward trend, with ING Barings predicting 8,7% as its end-of-year forecast. Mortgage rates are expected to increase further, she said, as interest rates remain high with an expected rise in the unit costs of labour pushing prices up further in August.