South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 3,7% year-on-year (y/y) for metro and other areas in August compared with 4,8% y/y in July, 5,0% y/y in June and 4,4% y/y in May, April and March, 4,8% y/y in February, and 4,2% y/y in January, Statistics South Africa (Stats SA) said on Wednesday.
CPIX was minus 0,2% month-on-month (m/m) in August compared with a 0,3% m/m increase in July.
Headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas — was up 1% y/y in August from a 1,6% y/y increase in July.
The core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, increased by 4% y/y in August compared with 4,8% y/y in July.
The CPIX, which is used by the South African Reserve Bank (SARB) for its inflation target, was expected to rise by 3,8% y/y.
The CPIX has only been calculated back to January 1997. The range of forecasts for CPIX was from 3,5% y/y to 4,1% 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 August headline CPI for all items was expected to drop marginally to 1,1% y/y. The range of CPI forecasts was from 0,9% y/y to 1,4% y/y.
The main contributors to the 3,7% increase in the CPIX were annual increases in housing, excluding interest rates on mortgage bonds; medical care and health expenses; household operation; transport; education; and food.
The annual rate of increase in food prices for the historical metropolitan areas was 1,6% – 0,4 of a percentage point lower than the corresponding annual rate of 2% at July 2004. Stats SA said the increase was due to annual increases in the prices of meat; ‘other’ food products; milk, cheese and eggs; fruit and nuts; fish and other seafood; and fats and oils.
The main contributors to the 1% increase in the y/y CPI were similar to those for July 2004, namely annual increases in medical care and health expenses; household operation; education; transport; and food. – I-Net Bridge