Inflation climbs to four-year high
Johannesburg - South Africa’s inflation rate climbed to the highest level in four years in August as the rand fell to its weakest level against the dollar since 2009, boosting gasoline prices.
Inflation accelerated for a second month to 6.4 percent from 6.3 percent in July, the Pretoria-based statistics office said on its website today.
That was in line with the median estimate of 23 economists surveyed by Bloomberg.
Consumer prices increased 0.3 percent in the month.
Price pressures from a 14 percent drop in the value of the rand this year have left policy makers little scope to stimulate an economy forecast to expand at the slowest pace since a recession in 2009.
The central bank will probably keep the benchmark rate at 5 percent tomorrow, according to 20 economists surveyed by Bloomberg.
Inflation breached the bank’s 3 percent to 6 percent target in July for the first time in 15 months.
“The recent acceleration in headline inflation has been driven by cost-push factors related to the rand weakness, mainly through fuel prices,‘‘ Peter Worthington and Miyelani Maluleke, economists at Johannesburg-based Absa Bank Ltd.’s corporate and investment banking unit, said in a e-mailed note to clients before the inflation data were released.
Gasoline prices in Africa’s largest economy rose 2.4 percent to a record 13.55 rand ($1.38) a liter in August after climbing 6.8 percent a month earlier.
Inflation will probably average 6.3 percent in the third quarter and slow to within the target range by the end of the year, according to the Reserve Bank. - Bloomberg