PMB inflation above average

2008-11-03 00:00

Inflationary pressures in Pietermaritzburg during September abated somewhat, with the Consumer Price Index (CPI) in the city sitting at 15,7% compared with 16,8% in August.

However, consumer inflation remains above the national average. The national CPI was 13,1% in September. The national CPIX — inflation excluding interest rates on mortgage bonds — was 13%.

Durban’s headline inflation rate was 13,8% in September (14,6% in August) while CPI for KwaZulu-Natal was 13,6% (14,2% in August).

Food inflation in Pietermaritzburg was lower at 19,1% in September.

Food inflation in Durban and Pinetown cooled fairly significantly to 19,6% from a 22,2% high in August.

Economists are confident that consumer inflation will fall to just above the Reserve Bank’s target range of three to six percent next year.

Lower commodity prices globally, the impact of higher base effects and a re-weighting of the CPI basket will also contribute to a moderation in consumer inflation.

However, the slowdown is expected to be less pronounced due to the recent weakness of the rand.

“The rand’s weakness may still seep into prices of imported goods despite slowing demand. In time the currency is likely to recover. However, it’s the uncertainty of this time frame that currently muddies the inflation outlook as retailers may be tardy to respond to general demand weakness and easing commodity prices,” warned Standard Bank economist Danelee van Dyk.

“The National Automobile Dealers’ Association has already pointed to some 25% cumulative car price increases for next year,” she added.

Nedbank’s Group Economic Unit believes the impact on consumer inflation will depend on how much of the rise is passed on to consumers.

Consumer inflation during September was fuelled mainly by stubbornly high food inflation, as well as high fuel and power costs.

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