South Africa’s annual CPI inflation quickens to 4-month high of 4.5% in April

By bne IntelliNews May 20, 2015

South Africa’s annual headline consumer price inflation accelerated to a 4-month high of 4.5% in April from 4.0% in March, mainly due to a narrowing decline in transport charges, data from Statistics South Africa showed. Analysts had projected April's inflation at 4.6%, according to a Business Day median consensus forecast from a survey of 13 economists.

Compared to the previous month, consumer prices rose 0.9% in April, slowing from a 1.4% increase in March.

The annual core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy eased to 5.6% last month from 5.7% in March. The monthly core inflation decelerated to 0.3% from 1.1%.

The sub-groups that contributed most to the headline annual inflation last month were housing and utilities (1.3pp, down from 1.4pp in March), miscellaneous goods and services (1.1pp, down from 1.2pp in March), and food and non-alcoholic beverages (0.8pp, down from 0.9pp in March).

On the other hand, the negative contribution of the transport subgroup decreased to -0.2pp last month from -0.8pp in March, as prices fell 1.1% y/y after a 5.0% y/y drop in March. Within that group, petrol prices dropped 10.8% y/y, softening from a 21.7% y/y plunge in March.

According to the central bank’s latest forecast from March, headline inflation should average 4.8% in 2015, rising to 5.9% in 2016. Core inflation is anticipated to average 5.5% this year, easing to 5.2% in 2016. The bank’s monetary policy committee is in the midst of a three-day meeting with an announcement due on May 21. While the repo rate is widely expected to remain unchanged at 5.75%, the bank is likely to revise upwards its inflation forecast and warn of a potential rate hike.

  y/y inflation contribution to the y/y change in headline CPI m/m inflation
  Apr-15 Mar-15 Apr-15 Mar-15 Apr-15 Mar-15
Food and non-alcoholic beverages 5.0% 5.9% 0.8 0.9 0.5% 0.8%
Alcoholic beverages and tobacco 9.6% 9.0% 0.5 0.5 1.2% 2.7%
Clothing and footwear 5.5% 5.7% 0.2 0.2 0.3% 0.5%
Housing and utilities 5.6% 5.7% 1.3 1.4 0.0% 1.1%
Household contents and services 2.3% 2.1% 0.1 0.1 0.2% 0.6%
Health 6.0% 6.0% 0.1 0.1 0.6% 0.2%
Transport -1.1% -5.0% -0.2 -0.8 4.5% 3.1%
Recreation and culture 2.0% 2.4% 0.1 0.1 0.3% -0.1%
Education 9.3% 9.3% 0.3 0.3 0.0% N.A.
Restaurants and hotels 5.7% 6.7% 0.2 0.2 -0.3% 0.9%
Miscellaneous goods and services 7.3% 7.5% 1.1 1.2 0.2% 0.2%
Headline CPI 4.5% 4.0%     0.9% 1.4%
Source: Staistics South Africa            

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