South Africa’s targeted CPIX inflation rate slowed to 6,3% in the year to August from 6,5% in July, data showed on Wednesday, slightly above forecasts.
Statistics South Africa also said that the all-items consumer price index (CPI) increased by an annual rate of 6,8%, compared to 7% in July.
On a monthly basis, CPIX rose by 0,5% in August compared to 1,1% growth previously, while headline CPI increased by 0,3% month-on-month.
A Reuters poll forecast CPIX would slow to 6,2% year-on-year and predicted a rise of 0,3% month-on-month.
‘Not pretty’
Nickey Meimar, a senior economist at Nedbank, said the figures were in line with consensus, but, the ”numbers are not pretty”.
”At over 6%, they are not where we want them to be. We are seeing a slight slow down.”
Annabel Bishop, an economist at the Investec Group, said CPIX inflation is still likely to only fall back within the inflation target range in 2008.
”Given recent evidence of slowing consumer demand and credit usage, we continue to believe the SARB [South African Reserve Bank] will leave interest rates unchanged at the October MPC meeting.”
Ridle Marcus, an economist at Absa, said: ”This was exactly in line with our expectations as transport subtracted from the index following a fuel price decrease in August.”
Mike Schussler, an economist at T-Sec, said the figures were in line with expectations.
”It is important because it is very likely to mean we are going to get an interest rate hike in October. The figures are not likely to affect the markets on the equities and rand side, but will have a negative impact on bond yields.”
Chris Hart, an economist at Investment Solutions, said: ”I think inflation is starting to behave itself.
”The question is though — have we started to see a peak in inflation and was the peak last month?
”However, there are some things on the horizon, like a fuel increase and slowing growth both locally and internationally, which could ease the pressure on inflation going forward. The consumers here are on a definite slowdown and I think that would be the definite trend for the future.” – Reuters, I-Net Bridge