JOHANNESBURG - South Africa’s headline consumer inflation slowed to 4.1 percent in September, down from 4,3 percent in August as shown by the consumer price index (CPI) as food prices remain stubborn.
Statistics South Africa (StatsSA) said the main contributors to the the 4,1 percent annual inflation rate were food and non-alcoholic beverages; housing and utilities; and miscellaneous goods and services.
Food and non-alcoholic beverages increased by 3,9 percent year-on-year, and contributed 0,7 of a percentage point to the total CPI annual rate.
Housing and utilities increased by 4,8 percent year-on-year, and contributed 1,2 percentage points.
Miscellaneous goods and services increased by 5,7 percent year-on-year, and contributed 0,9 of a percentage point.
The annual inflation rates for goods and for services were 4,0 percent and 4,2 percent respectively.
However, the consumer price index (CPI) increased by 0,3 percent month-on-month in September.
The main contributor to the monthly increase in the CPI was housing and utilities, which increased by 0,4 percent month-on-month and contributed 0,1 of a percentage point.
Senior dealer at TreasuryONE, Andre Botha, said the CPI number could give a clue as to the next movement of the monetary policy committee (MPC) regarding the interest rates scheduled towards the end of November.
Since 2000, the South African Reserve Bank (Sarb) has maintained inflation to be within a target range of 3 to 6 percent while maintaining interest rates between 6 and 7 percent. “We expect the number to print at 4.3 percent year on year, which is still within the inflation target the Sarb uses,” Botha said.
“With the inflation number still well within the band, this could give scope to the MPC to cut interest rates, but with what's going on globally the MPC could take the cautious route and sit on their hands at the next meeting.”