South Africa’s consumer price index excluding mortgage rate changes (CPIX) for metro and other areas, which is used by the South African Reserve Bank (SARB) for its inflation target, rose by 3,7% year-on-year in November after increasing by 4,4% in October, Statistics South Africa said on Wednesday.
The November CPIX was expected to ease to 3,7% year-on-year from October’s 4,4%, September’s 4,7% and August’s 4,8%, according to a survey of economists conducted by I-Net Bridge.
Economists’ forecasts for CPIX ranged from 3,5% to 4,2%.
Dawie Roodt, chief economist at the Efficient Group, said: “This is a wonderful number. It is better than what we expected and we expected a good number. I think we are going to see a rate cut in the first half of next year. There is very little inflationary pressure in this economy.”
Commented Mike Schussler, economist at T-Sec: “This is a very good number, better than I expected, and this should be good for the bond market. We are likely to see an interest-rate cut sooner than later.”
Annabel Bishop, economist at Investec, said: “Annual CPIX inflation plunged to 3,7% in November, from October’s 4,4%. This was the result of the 32-cent-a-litre petrol-price cut. Food prices rose on the month but this could be due to the vagaries of the weather.
“More information would be needed before taking this as an indication of second-round inflationary pressures due to high transport costs.
“We still believe interest rates will remain unchanged in 2006 as the inflation target is consistently achieved in that year. The risk to this forecast is that the SARB cuts interest rates by 50 basis points in 2006 as CPIX inflation falls to the lower limit of the inflation target range.” — I-Net Bridge