Consumer inflation breaches 6% targetComment on this story
Johannesburg - South Africa’s inflation rate accelerated to 6.1 percent in April, exceeding the central bank’s maximum 6 percent target and bolstering the case for higher interest rates.
Inflation quickened from 6 percent in March, the Pretoria- based statistics office said.
The median estimate of 30 economists surveyed by Bloomberg was for inflation to be unchanged. Prices rose 0.5 percent in the month.
The combination of a slowing economy, partly due to mining strikes, and faster inflation is creating a dilemma for the central bank.
Twenty-six of the 30 economists surveyed by Bloomberg predict the bank will keep the benchmark repurchase rate at 5.5 percent tomorrow, with the others forecasting an increase of 25 or 50 basis points.
The bank’s last rate increase was in January.
“Our baseline scenario is that rates will be kept on hold at this meeting, but that the risk of further rises as inflation moves above the 6 percent upper target limit is significant,” Nedbank said in an e-mailed note to clients before the release of the data.
Nedbank had forecast inflation would accelerate to 6.2 percent.
The core inflation rate, which excludes food, non-alcoholic beverages and gasoline costs, was unchanged at 5.5 percent. - Bloomberg News