CPI at 5,6% in PMB

2011-08-25 00:00

ALTHOUGH the key measure of consumer inflation, the consumer price index (CPI), continued its march upward last month, it is unlikely that the latest figure will prompt the South Africa Reserve Bank’s monetary policy committee to hike interest rates in the near term.

The CPI in July was 5,3% from five percent in June and 4,6% in May.

Driven upward by food, fuel and administered prices inflation, the CPI is now close to the upper limit of the bank’s target-range of three to six percent.

Nedbank’s Group Economic Unit said consumer inflation in July was plagued by higher electricity and water tariffs, as well as higher vehicle prices and the increasing cost of public transport.

Economists expect inflation to breach the six percent mark in December and remain steady thereafter.

The expected rise in inflation in the coming months is due mainly to the low base set in the final quarter of last year and as the impact of high international food and fuel prices.

Standard Bank economist Shireen Darmalingam expects interest rates to remain steady in 2011.

“Given the fact that SA’s economic fate remains in the hands of international developments, the SARB is likely to remain dovish in the event of a slow down in economic activity, both locally and abroad,” Darmalingam said.

CPI in Pietermaritzburg was softer at 5,6% in July from 5,7% in June and 5,2% in May.

KZN’s CPI was 4,8% last month from 4,5% in June 2011 and four percent in May 2011.

Durban’s CPI also came in higher at 4,8% last month from 4,2% in June and 3,6% in May.

The CPI for food and non-alcoholic beverages in Pietermaritzburg was 6,9% last month from 6,7% in June and 6,1% in May.

The CPI for food and non-alcoholic beverages in KZN was softer at 6,6% last month from 6,8% in June and with 5,8% in May.

The CPI for administered prices was 11,7% in last month.

Administered prices are the prices of goods and services provided by entities owned by the government, such as electricity tariffs.

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