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No change to consumer inflation in September

by , 21 October 2015

Earlier today, Stats SA released its consumer inflation data for last month.

The key economic indicator, as measured by the consumer price index (CPI), showed no change from August.

Let's take a closer look…


Consumer inflation remains at 4.6%


South Africa’s rate of consumer inflation remained unchanged at 4.6% last month on a year-on-year basis, reports IOL. But looking at the change from month-to-month, inflation rose from 0.2% in August to 0.4% in September.

A survey conducted by Bloomberg of 26 economists showed they expected a rise to 4.7%. The actual figure came in better than forecast.

Core inflation, which excludes energy, food, fuel and non-alcoholic beverages, was also unchanged at 5.3%, notes iAfrica.

Dennis de Jong of UFX.com points out, that the data has “been relatively stable in the past few months,” reports BDLive. This will be “positive news” for Nhlanhla Nene in the run up to his mini budget address this afternoon.

September’s data keeps consumer inflation within the Reserve Bank’s target range of between 3% and 6%.


What lies in store for inflation?


Yet the Reserve Bank forecasts that inflation “will breach the 3% to 6% target band next year, says Fin24. The central bank is trying to keep inflation under control with modest rate hikes while “trying to support an economy that contracted for the first time in more than a year in the second quarter”.

The economy hasn’t had it easy with rising interest rates and shrinking growth, adds BDLive. This along with a weak rand “and the economic downturn in China” is making the situation even worse.

Today’s inflation data is some welcomed news for the South African economy, which is under immense pressure. With inflation not spiralling higher, it takes pressure off the Reserve Bank to hike interest rates again.

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No change to consumer inflation in September
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