South African inflation to ease in H2 ’07

WASHINGTON – South African inflation is expected to climb higher in the first half of next year, exceeding six per cent, before easing in the second half, the World Bank said yesterday.

In its annual Global Economic Prospects report, the World Bank said inflationary pressures would decline “as weaker private consumption offsets inflationary pressures stemming from higher import costs due to a weaker currency and high construction costs as infrastructure investment picks up”. South Africa’s central bank governor Tito Mboweni said earlier he expected the CPIX inflation rate to break the upper end of its three to six per cent target range in April before falling back.The South African central bank also raised its repo rate by half a percentage point to nine per cent, its fourth increase since June, to tame inflationary pressures.The World Bank said inflationary pressures were also likely to decline in many oil-importing countries in Sub-Saharan Africa due to lower global oil prices and non-oil commodity prices and prudent monetary policies.Meanwhile, in oil producing countries in the region, strengthening currencies would help tame inflationary pressure stemming from pent-up domestic demand and expected increases in public spending.Nampa-ReutersSouth Africa’s central bank governor Tito Mboweni said earlier he expected the CPIX inflation rate to break the upper end of its three to six per cent target range in April before falling back.The South African central bank also raised its repo rate by half a percentage point to nine per cent, its fourth increase since June, to tame inflationary pressures.The World Bank said inflationary pressures were also likely to decline in many oil-importing countries in Sub-Saharan Africa due to lower global oil prices and non-oil commodity prices and prudent monetary policies.Meanwhile, in oil producing countries in the region, strengthening currencies would help tame inflationary pressure stemming from pent-up domestic demand and expected increases in public spending.Nampa-Reuters