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Consumer inflation peaked at 6.8% in December 2016, according to Statistics South Africa, which is two percentage points up from 6.6% reported in November.
This is still outside the Reserve Bank’s 3% to 6% target range.
“On average, prices increased by 0.4% between November 2016 and December 2016,” Stats SA stated.
Bloomberg consensus suggested that inflation would rise to 6.5%, and a Reuters poll of economists indicated the same.
The average annual consumer price index (CPI) for 2016 was 6.4%. This is 1.8 percentage points higher than the annual average in 2015, at 4.6%.
Food prices also increased during the year, with the price inflation for food and non-alcoholic beverages up by 11.7% year on year, a 0.1% increase from November.
Transport inflation was lower, down 0.4 of a percentage point from November. This is attributed to the 20 cents a litre drop in the petrol price. Year on year the transport inflation dropped from 6.4% to 5.7%.
Inflation for housing and utilities increased by 5.6% year on year, rising 0.1% in December.
The Reserve Bank’s outlook for CPI inflation is that it will come back within the 3% to 6% target range in 2017 when it is seen slowing to 5.8%, and easing to 5.5% in 2018. – Fin24 and Business Day
