JOHANNESBURG – The increase in South Africa’s consumer price index (CPI), which is used by the South African Reserve Bank (SARB) for its inflation target, was up 8.4% year-on-year (y/y) in April from 8.5% y/y in March, Statistics South Africa (Stats SA) said yesterday.
CPI was up 0.5% month-on-month after increasing 1.3% in March.
Consumer inflation was expected to have receded to an 8.2% increase, according to a survey of leading economists by I-Net Bridge. Forecasts ranged from 8.1% to 8.6%. CPI was at 9.7% a year ago.
Economists say that although it’s not too much of a shock, the figure is still concerning.
Mike Schüssler from economists.co.za said: ‘It’s been a week of shocks. Although this figure is not as big a shock as the GDP figure, it’s a sticky number that puts the cat among the pigeons again. It will not be good for the rand or the bond market, and it also means that we may not get the massive interest rate hike some were looking for. It’s going to make people sit up and think.’
Efficient Group’s Doret Els said, ‘It’s slightly above the market consensus. It shows that prices are still very sticky to show a significant slowdown.
‘It is worrisome if we look to see inflation below 6% in the third quarter.’ – I-Net Bridge
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