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 for its inflation target, rose by 4,3% year-on-year in January after increasing by 4% in December, Statistics South Africa said.
Headline consumer prices — the 12-month rate of change in the consumer price index (CPI) for metropolitan areas — was up 4% year-on-year in January from a 3,6% increase in December.
Dawie Roodt, chief economist at the Efficient Group, commented: “CPIX we had spot on. CPI was slightly better than expected — I suspect the exchange rate of the currency and oil prices were some of the reasons for that.
“I also think food price increases might have been lower than expected. The chance of a rate cut this year cannot be excluded.”
Elna Moolman, economist at Standard Bank, said: “This is lower than what we’d expected — the increase in food prices was much lower than what we’d anticipated. We had anticipated very strong food price increases, given this time of the year. They are going to be key in terms of outlook.
“We expect inflation to remain at the bottom half and the Reserve Bank to keep the interest rates steady.”
Commented Mike Schussler, economist at T-Sec: “I liked the figure — it came in as expected. It looks like March will come in under that figure, but not February because of the base effect.
“It will be good for the bond market, which will probably return to yesterday’s [Tuesday’s] levels. It’s neutral for the JSE and the rand. There is a chance of a rate cut in June.”
The figures were “spot on expectations”, said Colen Garrow, economist at Brait, “so they should not move the markets. This means there is no change in the current monetary policy stability.” — I-Net Bridge