Inflation rises to 4.8%

DECEMBER 9, 2015

The annual consumer price inflation increased to 4.8% in November 2015, the highest since July and up from 4.7% in October.

The consumer price index (CPI) increased by 0.1% month-on-month in November, Statistics SA announced on Wednesday.

In November the CPI for goods increased by 3.8% year-on-year (3.7% in October), and the CPI for services increased by 5.7% year-on-year (5.6% in October). 

The SA Reserve Bank increased the repo rate by 25 basis points at it last meeting, citing inflationary pressures as a reason for raising interest rates. South Africa has seen a total increase of 125 basis points in interest rates since the SARB started its tightening cycle 22 months ago.

Inflation is however still under control and within the SARB's targeting range of 3% - 6%.

However, Bloomberg reports the rand’s slump to a record low against the dollar on Tuesday may stoke inflation, which the SARB forecasts will breach the 6% ceiling in the first and fourth quarters of next year. The depreciation of the currency represents a risk for price growth, the Reserve Bank said in a report on Tuesday.

Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, slowed to 5.1% in November, the lowest rate of increase in prices since August 2013.