Dec CPI increase to 6.3%

On Tuesday, 26 January 2010, SA Reserve Bank Governor Gill Marcus said forecasts indicated that inflation could measure around 6.5% in both December and January, before moderating in the subsequent months.

“The headline CPI (for all urban areas) annual inflation rate in December 2009 was 6.3%. This rate was 0.5 of a percentage point higher than the corresponding annual rate of 5.8% in November 2009,” reported Statistics South Africa (Stats SA) on Wednesday, 27 January.

Stats SA said the food and non-alcoholic beverages index decreased by 0.3% between November and December 2009. “This decrease was as a result of monthly decreases in vegetables, other food, fish and sugar among other goods.”

The transport index increased by 0.6% between November and December 2009, mainly due to a 27c/l increase in the petrol price, Stats SA said.

“It came out below market expectations, most predicted that it would come in at 6.5% with the main reasons being the low base in petrol prices but the other thing is the decline in consumer durable goods,” said Nedbank economist Carmen Altenkirch.

Market consensus was that it would rise to 6.4% year-on-year. She said it was likely that CPI would fall within the target range in March.

Standard Bank predicted that it would come in at 6.5%.