In the first two months of 2004 the rate of CPIX inflation has risen moderately but remains well within the target range of 3% to 6%, South African Reserve Bank (SARB) Governor Tito Mboweni said on Thursday.
Speaking at the conclusion of a two-day monetary policy committee meeting at which interest rates were left unchanged, Mboweni said this increase in the inflation rate was nevertheless slightly less than the SARB forecast.
The SARB’s projections for the inflation rate in the first two months of the year were higher than the actual figures, he said.
“These results are therefore still within our projections indicating that the rate of inflation is likely to remain in the inflation target range over the next two years,” he added.
The 12-month rate of increase in the consumer price index for metropolitan and other urban areas excluding the interest cost of mortgage bonds (the CPIX) rose from 4% in December 2003 to 4,2% in January and 4,8% in February 2004.
If energy and food prices are excluded, the year-on-year rate of increase in the prices of other goods and services included in the CPIX has fluctuated around a level of about 5,7% over the four months up to February 2004.
The higher level of CPIX inflation excluding energy and food prices was due to continued high increases in the prices of services. The 12-month rate of increase in the prices of services included in the CPIX measured about 8% during the first two months of 2004.
In particular, high rates of increase were recorded in the rent of fixed property, medical costs and educational fees and the wages of domestic workers were adjusted upwards by the minister of labour’s determination.
The consumer prices of goods on a year-on-year basis rose from 2% in December 2003 to 3% in February 2004 largely due to increases in the running cost of motor vehicles.
Measured from month to month and adjusted for seasonal factors, CPIX inflation rose from low rates of increase in the last three months of 2003 to levels of 1% in January 2004 and 0,8% in February.
These monthly rates were the result of increases in the prices of petrol and diesel, food, alcoholic drinks and medical expenses. The prices of goods and services for most other categories continued to decline in the first two months of 2004, the SARB said. — I-Net Bridge