Consumer inflation eases – StatsSA

2010-04-28 15:51

Consumer inflation eased to 5.1% year on year for March, compared with 5.7% year on year in February, Statistics SA (StatsSA) has said.

The figure was in line with economists’ expectations.

StatsSA said that, on average, prices increased by 0.8% month on month.

“Even though the data was better than expected, we do not expect this to translate into further easing in the repo rate,” Standard Bank economist Danelee van Dyk commented on the data.

“Aside from South African Reserve Bank Governor Gill Marcus’ recent comments implying stable interest rates, we believe that inflation expectations will have to drop by a considerable margin – say a further 0.3 to 0.5 percentage points – before another rate cut will be reconsidered,” Van Dyk said, adding that in a similar vein, second-quarter economic data would have to disappoint to bring about the same decision.

This was ascribed to the fact that the relative weakness in household demand, credit growth and asset markets had already been factored into the latest interest rate prognosis.

Van Dyk said Standard Bank expected the first interest rate hike to be in March 2011. – Sapa

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