The increase in South Africa’s consumer-price index, excluding mortgage-rate changes (CPIX), for metropolitan and other areas, which is used by the South African Reserve Bank for its inflation target, was up 5% year-on-year (y/y) in October after a 5,1% y/y increase in September, Statistics South Africa said on Wednesday.
CPIX was up 0,1% month-on-month (m/m) after it increased by 0,3% m/m in September.
Headline consumer prices — the 12-month rate of change in the consumer-price index (CPI) for metropolitan areas — was up 5,4% y/y in October from a 5,3% y/y increase in September.
The core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes was up 3,3% y/y in October from an increase of 3,8% in September.
Monica Ambrosi, economist at ETM said: “I think the headline number shows that there are definitely accumulated pressures in the pipeline and reaffirms our view that we’re likely to see another two rate hikes.”
According to Dawie Roodt, economist at Efficient Research, the figures are “a bad number. It is much higher than what we had expected. With the money supply figures that just came out, the Reserve Bank will hike interest rates in December and again in February.”
Annabel Bishop, economist at Investec, said: “Annual CPIX inflation eased marginally, to 5% in October from September’s 5,1%, due chiefly to price pressures from food. The CPIX figure was only slightly above consensus, and does not indicate the presence of significantly increased inflationary pressure. We continue to forecast a 50 basis-points hike in interest rates at the December Monetary Policy Committee meeting.” — I-Net Bridge