Search:  
Gauteng Business News
3786
VIEWS

Send  Share  RSS  Twitter  20 Oct 2016

FINANCE: Inflation Surpasses 6% Target to 6.1%

 





Recent Gauteng Business News

inflation will nudge higher in the coming months, but should dip into the target range in 1Q17

19 October 2016 - September headline CPI rose to 6.1% y/y, breaching the upper 6% target band set by the South African Reserve Bank, after a brief deceleration in August (5.9%). Nevertheless, the reading was below our expectations of 6.3% and strengthens the consensus forecast for rates to remain on hold.

In any event, we see the September print as relatively benign despite stubbornly high food inflation (11.6% y/y) which has been driven higher by bread and cereals (16.6% y/y) as well as fruit (25% y/y). Importantly, however, month-on-month food inflation moderated from 0.9% in August to 0.1% in September, with bread and cereals decelerating from 2.0% m/m to 0.7%, and meat registering its second consecutive month-on-month contraction (-0.5%). Year-on-year vehicle price inflation is closing in on double-digit growth, printing at 9.4% in September, and bodes ill for new vehicle sales for the rest of the year. Petrol CPI contracted -3.4% y/y, but this is likely to return to positive territory given recent and pending fuel price increases. Actual rental and owner’s equivalent rent, both of which are surveyed in September, also drove inflation higher at 0.9% and 0.8% m/m respectively.

We remain of the view that inflation will nudge higher in the coming months, but should dip into the target range in 1Q17 as the higher base from earlier this year softens the number. To be sure, there are still many risks that could derail this outlook, among them a higher oil price (currently $52/bbl), any currency blowouts on domestic political noise, and insufficient rainfall that would jeopardise crop yields.


 
 
 
spine-alignsolarportBusiness ProfilesBubble-Chairstudy-it-online
 
   
 
 
 
  Accomodation
Accommodation


Online Foreign Exchange
Foreign Exchange


Directory
Directory


Fax
Fax 2 Email


Finance
Finance


Furniture
Furniture


Casino
Online Casino


Restaurant
Restaurant


Auctions
Shop Online


Study IT
Study IT Online


Web design
Web Design


Weddings
Weddings


Work
Work from Home
 
 
 
 
 
Company News
 
 

 

© 2024 www.gbn.co.za. All rights reserved.

Daily Newsletter Subscription

 

Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Name:
Email Address: