Consumer inflation remains unchanged at 5.9%

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

The consumer price index (CPI) showed that inflation remained unchanged from September to October.

Let's take a closer look…

Consumer inflation reflected economists’ forecasts

As economists had forecast, consumer inflation came in “at 5.9% year-on-year in October,” reports Fin24. This is the same as CPI for September.

This means inflation remains in the Reserve Bank’s target band of between 3% and 6%.

Looking at the data on a month-on-month basis, inflation “rose 0.2% in the month,” says IOL.

Helping stem pressures on consumer inflation is the falling oil price, adds IOL. Since June, the price of Crude oil is down around 30%.

Annabel Bishop, the chief economist at Investec, says that they expect inflation to continue to trend downwards for the rest of the year, notes BDLive. And with the chance of a hefty petrol price cut at the beginning of December, this “will ease CPI inflation lower”.

Kamilla Kaplan, an economist with Investec, says the upward pressures on inflation “have abated reflecting recent food and fuel price developments,” says IOL.

With inflation unchanged interest rates look likely to remain unchanged for now

Tomorrow, the Reserve Bank will conclude its last monetary policy committee meeting for the year. Interest rates will be up for discussion.

Laura Campbell, as economist at Econometrix, says that with inflation coming in as expected and within the central bank’s target band, the Reserve Bank “will find it difficult to justify raising interest rates at the conclusion of its meeting on Thursday,” reports BDLive.

So tomorrow all eyes will be watching the announcement after the Reserve Bank’s meeting. But with inflation coming in unchanged, chances are there’s not going to be an interest rate hike tomorrow.


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Tags: inflation, consumer inflation, cpi, october cpi, interest rates, south african economy,