South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 4,2% year-on-year (y/y) for metro and other areas in October compared with 3,7% y/y in September and August, 4,2% 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 up 0,5% month-on-month (m/m) in October compared with a 0,3% m/m rise in September.
Headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas – was up 2,4% y/y in October from a 1,3% y/y increase in September.
The core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, was up 4,4% y/y in October compared with 4,0% y/y in September.
The CPIX, which is used by the South African Reserve Bank (SARB) for its inflation target, was expected to edge up to 4,1% y/y.
The CPIX has only been calculated back to January 1997. The range of forecasts for CPIX was from 3,9% y/y to 4,5% 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 October headline consumer price index (CPI) for all items was also expected to rise to 2,3% y/y from September’s 1,3% y/y increase. The range of CPI forecasts was from 2,1% y/y to 2,6% y/y.
The CPIX increase of 4,2% was 0,5 of a percentage point higher than the corresponding annual rate of 3,7% at September 2004. The seasonally adjusted index increased by 0,3%.
Stats SA said the annual increase of 4,2% in the CPIX for the historical metropolitan and other urban areas was mainly due to annual increases in the price indices for transport (+0,9 of a percentage point), housing, excluding interest rates on mortgage bonds (+0.8 of a percentage point), medical care and health expenses (+0,7 of a percentage point), food (+0,5 of a percentage point), household operation (+0,4 of a percentage point) and education (+0,4 of a percentage point).
These annual increases were slightly counteracted by annual decreases in the price indices for clothing and footwear (-0,2 of a percentage point), recreation and entertainment (-0,1 of a percentage point) and “other” products (-0,1 of a percentage point).
The headline inflation rate of 2,4% at October was 1,1 percentage points higher than the corresponding annual rate of 1,3% at September 2004 (ie: the percentage change in the CPI for the historical metropolitan areas at September 2004 compared with that at September 2003).
Stats SA said the higher annual rate could be explained by increases in the annual rates of change for:
The CPI for transport for which the rate increased from 4,4% at September 2004 to a higher rate of 7,0% at October 2004.
The CPI for food for which the rate increased from 1,6% at September 2004 to a higher rate of 1,9% at October 2004.
The CPI for housing for which the rate increased from -6,9% at September 2004 to a higher rate of -3,8% at October 2004.
The annual increase of 2,4% in the Consumer Price Index for the historical metropolitan areas was mainly due to annual increases in the price indices for transport (+0,9 of a percentage point), medical care and health expenses (+0,7
of a percentage point), household operation (+0,4 of a percentage point), education (+0,4 of a percentage point) and food (+0,4 of a percentage point).
These annual increases were partially counteracted by annual decreases in the price indices for housing (-0,8 of a percentage point), clothing and footwear (-0,1 of a percentage point), recreation and entertainment (-0,1 of a percentage point) and “other” products (-0,1 of a percentage point). – I-Net Bridge