South Africa’s targeted CPIX (consumer price index excluding interest rates on mortgage bonds) inflation rate accelerated to 5,5% in the year to March, official data showed on Wednesday, bang in line with forecasts and the highest level of increase in three-and-a-half years.
Figures from Statistics South Africa also showed the all-items consumer price index (CPI) increased by an annual rate of 6,1% in March, also in line with forecasts, compared with February’s 5,7%.
On a monthly basis, CPIX rose by 1% after a 0,1% contraction in February, while headline CPI increased by 0,9%.
A Reuters poll had predicted CPIX would rise by 5,5% year-on-year — the highest since reaching 6,3% in August 2003 — and 1% percent month-on-month.
”March CPIX, although in line with market expectations … signals that the spike up in South African inflation towards the upper end of the inflation target is well under way,” said Razia Khan, London-based regional head of research for Africa at Standard Chartered Bank.
”Given the magnitude of the fuel price rise in April, expect inflation to worsen over the coming months,” she said.
The central bank held its repo rate steady at 9% for the second consecutive meeting earlier this month, but warned the inflation outlook had deteriorated slightly.
Reserve Bank Governor Tito Mboweni said continued rapid growth in lending was not immediately inflationary, although rising oil and food prices posed risks to price trends.
He said the CPIX gauge was still not expected to breach the upper end of the bank’s 3% to 6% range, and was seen peaking at 5,9% in the second quarter of this year as opposed to a high of 5,6% forecast in February.
Consumer spending has remained high, with credit growth near record levels at 26,12% year-on-year in February. — Reuters