South Africa’s Consumer Price Index (CPI) moderated to 6.3% year-on-year in July, Statistics South Africa (Stats SA) said on Wednesday.
In July, CPI continued to breach the 3% – 6% target range of the Reserve Bank, though at a lower rate than the 6.6% recorded in June 2014.
According to Stats SA, the food and non-alcoholic beverages index was unchanged in July 2014, while the housing and utilities index increased by 2.1% between June and July 2014.
On a month-on-month basis, inflation rose by 0.8%, driven mostly by housing and the utilities category. This comes as electricity, water and other services price increases were levied in July.
The transport index increased by 0.9% between June and July 2014 due to a 29 cent a litre increase in the price of petrol. The annual rate decreased to 6.9% in July 2014, from 8.6% in June 2014.
Consensus was that CPI would come in at 6.4% year on-year.
In July, the Reserve Bank raised the repo rate by 25 basis points to 5.75% so as to tame rising inflation.
Nedbank economists expect inflation to remain above the target range of 6% for the remainder of the year.
“The biggest risk to the inflation trajectory remains the rand. Inflation pressures though will be mitigated by the recent slowdown in global food prices, as well as the drop in oil prices (next month’s inflation release will show that petrol prices remained flat for the first time since January 2009),” said Nedbank. – SAnews.gov.za
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