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November CPI eases to 5.8%

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The Consumer Price Index (CPI) eased to 5.8% year-on-year in November in line with market expectation.

“The headline CPI (for all urban areas) annual inflation rate in November 2014 was 5.8%. This rate was 0.1 of a percentage point lower than the corresponding annual rate of 5.9% in October 2014,” said Statistics South Africa (Stats SA) on Wednesday.

The food and non-alcoholic beverages index increased by 0.6% between October 2014 and November 2014.

The transport index decreased by 1.2% between October 2014 and November 2014 mainly due to a 45c/litre decrease in the price of petrol.

On average, prices were unchanged between October and November.

The biggest contributors to the annual figure were the housing and utilities as well as the food and non-alcoholic beverages categories which added 1.4% and 1.2% respectively to the figure.

“Inflation is likely to remain relatively contained in the coming months on the back of lower commodity – especially oil – prices. The volatile rand though does pose an inflation risk and we might start seeing the effects of the rand coming through in the numbers later in 2015,” said Nedbank economists.

The bank said that the inflation outlook has improved significantly over the past few months and inflation is expected to remain under the Reserve Bank’s 6% upper target range well into 2015.

“This, together with the weaker growth outlook, reduces the probability of an interest rate hike at the Monetary Policy Committee’s January meeting. Our forecast is for rates to remain on hold throughout the first half of 2015 and then to start increasing in the second half of 2015 to end the year at a repo rate of 6.75%,” said the economists. – SAnews.gov.za

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.