SA inflation slows but rand still a risk
Thématique :
sud afrique
South Africa's targeted CPIX inflation rate slowed for the first time in a year in September, data showed on Wednesday, slightly undercutting forecasts and suggesting price pressures are starting to ease.
Statistics South Africa said growth in CPIX, which leaves out mortgage costs, slowed to 13% year-on-year in September from an all-time high of 13,6% in August.
The gauge had been on an uninterrupted uptrend since September 2007, and has been above the top end of a 3-6 percent target band since April last year.
The all-items consumer price index (CPI) increased by 13,1% compared to 13,7% in August. On a monthly basis, CPIX was up 0,1% in September, while headline CPI increased by 0,2%.
The South African Reserve Bank has raised its repo rate by 5 percentage points in total since June 2006 in a bid to tame inflation, but left it unchanged at 12% on two occasions after the last half percentage point hike in June.
Earlier this month, Central Bank Governor Tito Mboweni said the outlook had improved moderately since the previous monetary policy committee meeting in August but warned a recent sharp depreciation in the rand posed a "significant upside risk".
A Reuters poll of 18 economists had forecast CPIX would slow to 13,2% year-on-year.
"It is a bit better than we expected. It would seem that we have seen the peak of inflation in the last three months. We are fairly confident inflation will move lower in the next few months and into next year," said Citadel economist Salomi Odendaal.
"The biggest risk for inflation is the weaker rand, if it weakens further it will put further pressure on inflation."
The rand has shed about 35% versus the dollar since the start of the year. It traded at 10,3350% around 09:57 GMT, compared with 10,34 just before the data was issued.
Earlier this month the National Treasury said inflation targeting would remain the anchor of South Africa's monetary policy but that the headline number, instead of CPIX, will be the new target measure from January 2009.
Statistics South Africa said growth in CPIX, which leaves out mortgage costs, slowed to 13% year-on-year in September from an all-time high of 13,6% in August.
The gauge had been on an uninterrupted uptrend since September 2007, and has been above the top end of a 3-6 percent target band since April last year.
The all-items consumer price index (CPI) increased by 13,1% compared to 13,7% in August. On a monthly basis, CPIX was up 0,1% in September, while headline CPI increased by 0,2%.
The South African Reserve Bank has raised its repo rate by 5 percentage points in total since June 2006 in a bid to tame inflation, but left it unchanged at 12% on two occasions after the last half percentage point hike in June.
Earlier this month, Central Bank Governor Tito Mboweni said the outlook had improved moderately since the previous monetary policy committee meeting in August but warned a recent sharp depreciation in the rand posed a "significant upside risk".
A Reuters poll of 18 economists had forecast CPIX would slow to 13,2% year-on-year.
"It is a bit better than we expected. It would seem that we have seen the peak of inflation in the last three months. We are fairly confident inflation will move lower in the next few months and into next year," said Citadel economist Salomi Odendaal.
"The biggest risk for inflation is the weaker rand, if it weakens further it will put further pressure on inflation."
The rand has shed about 35% versus the dollar since the start of the year. It traded at 10,3350% around 09:57 GMT, compared with 10,34 just before the data was issued.
Earlier this month the National Treasury said inflation targeting would remain the anchor of South Africa's monetary policy but that the headline number, instead of CPIX, will be the new target measure from January 2009.
