Inflation above target for third month

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Johannesburg - South Africa’s inflation rate was unchanged at 6.6 percent percent in June, exceeding the central bank’s target for a third month.

The median estimate of 28 economists surveyed by Bloomberg was 6.7 percent.

Prices rose 0.3 percent in the month, Pretoria-based Statistics South Africa said on its website today.

The Reserve Bank raised its benchmark repurchase rate by 25 basis points to 5.75 percent last week, even as it forecast economic growth will slow to 1.7 percent this year from 1.9 percent in 2013.

Inflation will stay outside the 3 percent to 6 percent target band until the second quarter of next year, Governor Gill Marcus said.

“The upside risks to inflation prevail,” Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said in an e-mailed note to clients before the data was released.

Much of the outlook is “dependent on the behaviour of the currency, domestic food prices and the extent to which local retailers start to pass on price increases more aggressively to consumers,” he said.

The core inflation rate, which excludes food, non-alcoholic beverages, gasoline and electricity costs, rose to 5.6 percent in June from 5.5 percent in the previous month. - Bloomberg News

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