adminPRETORIA — South Africa’s annual inflation rate rose to 6,4 percent in August, official figures showed yesterday, well above the central bank’s target.Statistics South Africa said consumer prices ticked up from the corresponding rate of 6,3 percent in July, the main driver being an 8,7 percent hike in transport costs.
“It’s not really a surprise if you look at the up-tick, it was in line with the consensus estimate,” said Carmen Nel, an analyst at Rand Merchant Bank speaking from Cape Town.
“While the outcome is in line with what the South African Reserve Bank has embedded in their forecast, the evidence will continue to make them hawkish on the inflation outlook,” said Nel, “but not enough to tighten policy anytime soon.”
The inflation announcement comes one day before the South African Reserve Bank will announce its latest interest rate decision.
The monetary policy committee is expected to keep the key repo rate at 5 percent.
Inflation is likely to decrease in September and October, following petrol price cuts, said Annabel Bishop, an analyst at Investec Group Economics in Johannesburg, in a note.
Low consumer and business confidence combined with weak domestic demand continues to plague growth in the country, beset by a weak rand and labour strife.
“Everyone is waiting to see what the South African Reserve Bank decision will be tomorrow,” said Travis Robson, head of premium clients at IG South Africa, a trading group in Johannesburg. “Markets are subdued waiting for that, the CPI (consumer price index) is kind of taking a back-seat.” — AFP.
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