CPI inflation expectations decreased during 09Q3. Average inflation expectations declined by 0.5 percentage points to 8.2% in respect of 2009, by 0.6 percentage points to 7.5% regarding 2010 and for 2011 by 0.4 percentage points to 7.5%. Trade unions’ inflation expectations regarding 2009 dropped by 1.4 percentage points to 8.3%. Business people see inflation expectations for 2009 at 9.1% (down by 0.3 percentage
points).

Analysts’ inflation expectations for 2009 are 7.2% (0.3 percentage points increase). All three groups’ inflation expectations for 2010 and 2011 are lower than for 2009. Analysts’ expectations of 5.6% for 2010 and 5.5% for 2011 are within the inflation target range. Business people’s inflation expectations for 2010 and 2011 follow a similar trend: 8.7% regarding 2010 (8.6% previously) and 8.5% for 2011 (8.3% previously). Trade unions expect 8.2% for 2010 (down by 1.9% points) and 8.3% for 2011 (down by 1.6 percentage points).

Households’ inflation expectations for 2009 increased to 11.2% during 09Q3 (10.3% in 09Q2). The latest results are discussed in more detail in a report that appears on our webpage at www.ber.ac.za. The SA Reserve Bank commissioned the BER to conduct an inflation expectation survey.