Expect prices to rise

2012-12-13 00:00

THE impact of a recent drought in the United States and festive season price hikes will be felt by consumers during the holidays, judging by the comments of economists following the release of the latest Consumer Price Index (CPI) yesterday.

The November 2012 CPI was unchanged at 5,6%.

Economists warned that rising food prices would put short-term upward pressure on the CPI in December 2012, before easing in 2013. The CPI is expected to remain within the South African Reserve Bank’s target range of 3-6% for the next six months or so.

The drivers of the latest CPI were food and non-alcoholic beverages, as well as housing and utilities.

The CPI for administered prices remained above the CPI rate, coming in at 8,7% year-on-year.

KZN’s inflation rate was unchanged at 5,9% in November 2012. The CPI in Durban was 5,3% last month compared with 5,4% in October 2012. Pietermaritzburg’s CPI came in at 5,8% in November from 6,1% in October.

Food and non-alcoholic beverage inflation in KZN in November was higher at 7,5% from seven percent in October. Food and non-alcoholic beverage inflation in Durban was 7,7% last month from 6,7% in October. Food and non-alcoholic beverage inflation in Pietermaritzburg was 7,1% in November from 7,3% in October.

Nedbank economist Busisiwe Radebe said food price hikes were inevitable following the drought in the U.S., as well as seasonal increases associated with the festive season.

Radebe said the rand could play a vital role in the movement of the CPI in 2013. “Barring any major depreciation, inflation should remain close to the upper end of the target range. The focus will therefore be on the economic outlook. Much will depend on whether the US ‘fiscal cliff’ can be averted and on developments in Europe.”

Standard Bank economist Shireen Darmalingam said: “We believe the {Reserve] Bank will retain its pro-growth bias, and expect it to cut rates in quarter two of 2013. However, the wide current account, increasing inflation and slow growth may see the SARB delay such a rate cut.”


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
Comments have been closed for this article.

Inside News24

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


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.


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.