You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Inflation rate gains less than forecast to 4.7%

Analysts remain divided on whether the Sarb will increase the repo rate on Thursday/

South Africa’s inflation rate rose less than economists forecast to 4.7% in June, prompting investors to pare bets of an interest rate increase tomorrow.

Inflation accelerated from 4.6% in May, the Pretoria-based statistics office said on its website on Wednesday. The median estimate of 24 economists surveyed by Bloomberg was 5%. Prices rose 0.4% in the month.

Analysts are divided on whether the Reserve Bank will increase its benchmark rate for the first time in a year from 5.75% on Thursday. While a weaker rand and rising electricity costs are putting pressure on inflation, the economy is struggling to recover from the slowest expansion since the 2009 recession.

Forward rate agreements starting in one month, used to speculate on rates, fell 5 basis points to 6.25% as of 10:06 a.m. in Johannesburg. The rand fell 0.2% to 12.3518 against the dollar.

Seventeen of the 31 economists surveyed by Bloomberg predict an increase in the benchmark rate of 25 basis points, while the rest say it will stay unchanged.

Inflation is forecast by the central bank to breach the 3% to 6% target next year. Deputy Governor Daniel Mminele said in an interview on July 7 that policy makers have little flexibility to continue keeping the key rate on hold.

Core inflation, which excludes food, non-alcoholic beverages, gasoline and electricity costs, slowed to 5.5% in June from 5.7% in the previous month.

COMMENTS   1

You must be signed in to comment.

SIGN IN SIGN UP

I seriously believe that the CPI figures are being fudged to ward off unrealistic trade union demands. Manufacturers are wantonly reducing the sizes of their products across their product range and now you are getting less for the same price. Also I doubt whether STATSA is really monitoring the prices in the shops as well as they should. Surely STATSA could get a price data dump from the big supermarkets weekly and then calculate real CPI for food products. Also I am not sure that the weightings are real anymore as my gut feel is that CPI is about 3 – 4% understated

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: