PMB inflation highest

2008-07-30 00:00

CONSUMER inflation (CPI) in Pietermaritzburg during the month of June accelerated to 14,7%, the highest inflation rate of all major metropolitan and rural areas in the country.

Durban’s CPI, which includes interest rates on mortgage bonds, stood at 12,8% last month.

The main inflationary factors for Pietermaritzburg consumers are spiralling food prices (up 19% in June) and transport costs.

Nationally, CPIX — inflation excluding interest rates on mortgage bonds — was 11,6%, up from 10,9% in May.

National CPI or headline inflation in June came in at 12,2%. Rampant food inflation in Durban and Pinetown persisted, at 20% in June.

Although economists are divided over the issue, the latest inflation data, coupled with Tuesday’s higher than expected private sector credit extension growth figures, do not bode well for the short-term interest rates.

Credit extension growth in June 2008 was propped up mainly by corporate borrowing.

The SA Reserve Bank (Sarb) will announce its decision on interest rates on August 14. The bank’s target range for inflation is three to six percent.

However, a distant ray of hope may emerge in the form of August 2008 inflation data, set to be released at the end of September, as a result of a weakening oil price and the strengthening of the rand in recent weeks.

These two positive trends should result in lower fuel price inflation next month.

However, Standard Bank economist Danelee van Dyk said the Reserve Bank may not be convinced to keep monetary policy unchanged in August, due to the volatile nature of commodity prices.

“We are still confronted by stubbornly high food inflation — mostly in processed foods — and rising underlying inflationary pressures.

“In South Africa, the consumption per capita of dairy products (processed) has grown by 26% since 2003, outpacing growth in consumption of meat (unprocessed).

“Prices of grain products (processed), breakfast cereals, pasta, and biscuits have risen to … 33,8% year on year in June from 18,4% in January this year,” she said.

Van Dyk believes that South Africans can expect interest rates to p[eak on August 14.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/Sport

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.