/ 29 October 2008

Inflation figures ‘good news’ for SA

South Africa’s targeted CPIX (consumer inflation less mortgage costs) slowed for the first time in a year to 13% year-on-year in September from 13,6% in August, below forecasts, official data showed on Wednesday.

Statistics South Africa said the all-items consumer price index (CPI) increased by an annual rate of 13,1%, compared with 13,7% in August.

On a monthly basis, CPIX was at 0,1% in September, while headline CPI increased by 0,2% month-on-month.

According to Nicky Weimar, economist at Nedbank: ”It’s certainly good news. It seems, although it is little early to tell, that August was the peak for CPIX. From the Reserve Bank perspective, it’s a good trend and strengthens the case for a rate cut in the short term.”

Mike Schussler, economist at T-Sec, said: ”The numbers should be good news for the South African market. It will probably be good for bonds. The main thing is that the major inflationary pressure is out of the way. But the big question mark at the moment is the rand. Any more blowouts in emerging markets will pull the rand down further and that will mean further inflationary pressure next year.” — Reuters, I-Net Bridge