Consumer Inflation

April’s slight uptick suggests that the Reserve Bank will keep the benchmark repo rate at 7.5% next week

With inflationary pressures heightened, the Reserve Bank might take a cautionary approach regarding its interest rate decision on Thursday

Governor Lesetja Kganyago said the central bank would wait for the inflation rate to fall within its 3% to 6% target before it makes a cut

Repo rate drops to 3.5% as Reserve Bank predicts a 7.3% contraction in South Africa’s GDP

In November inflation for goods increased by 5.3% year-on-year, from 5.1% in October, according to Stats SA

South Africa, Nigeria and the UK are expected to release consumer inflation figures and the US will give an update on housing data this week.

A lower-than-expected inflation increase means there is less chance of a repo rate hike in the next quarter, say analysts.

Consumer inflation for June was lower than expected, but analysts still expect a number of factors to push it beyond its upper band of 6%.

Despite signs of economic growth, inflation and energy fears have put a damper on South Africa’s economic forecasts.

South Africa’s consumer price index, which was expected to have increased, has remained steady at 6.1% year-on-year in December.

As Stats SA is due to release December’s consumer price index this week, economists suggest consumer inflation is likely to have risen to 6.2%.

South Africans are spending less on food and health care compared to the last two years, said debit and credit card distributor Sureswipe on Friday.

Inflation figures came in higher than expected as businesses — and consumers — face a potential spate of government-controlled price increases.

Inflation will slip out of the SA Reserve Bank’s target band by the end of 2011 but will leave the repo rate unaffected, economists predict.

Inflation in SA remains "highly persistent" although pressures have been contained by weak demand and a relatively strong rand, says Pravin Gordhan.