CPI rises above midpoint of Sarb target

JOHANNESBURG – Consumer price inflation (CPI) rose above the midpoint of the SA Reserve Bank (SARB) target band for the first time in 15 months, due to higher fuel prices in February, but in spite of this economists still expect that an interest rate cut is on the cards today due to global concerns around the coronavirus.

Statistics South Africa (StatsSA) said yesterday that the annual CPI nudged up by 0.1percentage point month-on-month, from 4.5percent in January to 4.6percent in February after increasing by only 0.3percent the previous month.

Core inflation remained at multi-year lows in January, at a rate of 3.8percent year-on-year versus a prior 3.7percent.

But fuel price inflation remained elevated at 12.7percent year-on-year as petrol and diesel prices were respectively 195c a litre and 148c a litre higher than in February 2019.

However, Investec’s Kamilla Kaplan said fuel price inflation should decrease next month, following the international oil price shock this month.