South Africa’s CPIX inflation (headline inflation excluding mortgage costs) stood at 4% for the year to December, down from 4,1% in November. This is in line with market expectations.
CPIX is the inflation measure used by the South African Reserve Bank for purposes of inflation targeting and the target range is between 3% and 6% year-on-year.
The 2003 annual average for CPIX was 6,8% compared with 9,3% in 2002 and 6,6% in 2001.
The December headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas — was up 0,3% for the year from a 0,4% annual increase in November.
The annual average for CPI was 5,8% compared with 9,2% in 2002 and 5,7% in 2001.
Stats SA said the main contributors to the 4,0% increase in the CPIX in December were annual increases in housing, excluding interest rate on mortgage bonds; medical care and health expenses; food; household operation; and education.
It added that interest rates on mortgage bonds decreased by 5% from December 2002 to December 2003, which mainly accounts for the significant difference between the inflation rates in CPI and CPIX. The reduction in interest rates is driven by the Reserve Bank’s decision to cut the repo rate by 5,5% between June and December last year.