South Africa’s CPIX inflation (headline inflation excluding mortgage costs) was up 3,6% year-on-year (y/y) for metro and other areas in January compared with 4,3% y/y in December, Statistics South Africa said on Wednesday.
The CPIX was expected to ease to a 3,6% y/y increase in January, according to a survey of economists conducted by I-Net Bridge. Economists’ forecasts for CPIX ranged from 3,2% y/y to 4% y/y.
The January headline CPI was also expected to have eased with the median forecast at 3% y/y aand the range from 2,8% y/y to 3,4% y/y.
Nico Kelder, economist at Efficient Group, said: “It is a good number — in line with what we expected. It shows that with the current strengthening in the currency that we can expect an interest rate cut in April.”
Mike Schussler, economist at T-Sec, said: “This is a very good figure and this is what most people expected. I think this number is going to be good for the bond market and the rand. It certainly increases the chances of repo rate cut. This is the lowest CPIX South Africa has ever had.”
According to Annabel Bishop, economist at Investec, the CPIX “came out below expectations again. Given the intensifying upward pressure on real interest rates, the outcome is supportive of a 50 basis-point interest-rate cut in April.”
Johan Rossouw, chief economist at Vector Securities, said: “The figures are pretty much in line with the expectations, so no surprises there. Obviously, a significant decline in the price of fuel had a positive impact. In terms of interest rates outlook going forth, I think we’ll have to wait and see what’s in the budget first.” — I-Net Bridge