South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 4,4% year-on-year (y/y) for metro and other areas in May compared with 4,4% y/y in both April and March, 4,8% y/y in February, 4,2% y/y in January and 4% y/y in December, Statistics South Africa (Stats SA) said on Wednesday.
CPIX was up 0,1% month-on-month (m/m) compared with a 0,3% m/m increase in April.
Headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas — was up 0,6% y/y from a 0,2% y/y increase in April.
The May core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, rose to 4,9% y/y from 4,5% y/y in April, 4,7% y/y in March, 5,3% y/y in February and 4,7% y/y in January.
The CPIX, which is used by the South African Reserve Bank (SARB) for its inflation target, was expected to rise to 4,7% y/y.
The CPIX has only been calculated back to January 1997. The range of forecasts for CPIX was from 4,4% y/y to 5,1% y/y. The SARB’s inflation target is to keep the y/y rate for CPIX within a range of 3% y/y to 6% y/y.
The last time South Africa experienced y/y deflation at the consumer level was August 1954 when it was -0,3% y/y.
The May headline CPI for all items was also expected to increase. The consensus forecast was for a 0,7% y/y increase. The range of CPI forecasts was from 0,4% y/y to 1,2% y/y.
The higher annual CPI rate in May 2004 compared with April 2004 can be explained by increases in the annual rates of change for:
the CPI for alcoholic beverages, for which the rate increased from 11% in April 2004 to 11,1% in May 2004.
The CPI for transport, for which the rate increased from 1,1% in April 2004 to a higher rate of 4,2% in May 2004.
However, the increases in the annual rates of change were partially counteracted by a decrease in the annual rate of change for the CPI for food for which the rate decreased from 2,7% at April 2004 to a lower rate of 2,3% in May 2004.
The annual increase of 0,6% in the CPI for the historical metropolitan areas is mainly due to annual increases in the price indices for medical care and health expenses (+0,8 of a percentage point), household operation (+0,6 of a percentage point), transport (+0,6 of a percentage point), food (+0,5 of a percentage point) and education (+0,4 of a percentage point).
These annual increases were partially counteracted by annual decreases in the price indices for housing (-2,7 percentage points), “other” products (-0,2 of a percentage point), recreation and entertainment (-0,1 of a percentage point) and clothing and footwear (-0,1 of a percentage point).
The rural CPI, which is now an official statistic, not merely a discussion paper, was 1,6% y/y in May from 1,7% y/y in April. The rural CPIX dipped to 3,1% y/y from 3,2% y/y in April.
When the SARB announced its CPIX measure in April 2000, SARB governor Tito
Mboweni said he favoured a more inclusive measure.
To meet this need, Statistics South Africa has been compiling a rural and total South Africa CPIX measure since January 2002.
The total country CPIX was 4,2% y/y in May from 4,1% y/y in April and 4,2% y/y in both March and February after being at a record low of 3,8% y/y in both December and January from 3,9% y/y in November.
The annual average in 2003 was exactly the same as the narrower CPIX at 6,8%. – I-Net Bridge