South Africa’s targeted CPIX inflation slowed for the second consecutive month to 12,4% year-on-year in October from 13% in September, slightly below forecasts, official data showed on Wednesday.
Statistics South Africa said the all-items consumer price index (CPI) increased by an annual rate of 12,1%, compared to 13,1% in September.
On a monthly basis, CPIX was at 0,2% in October, while headline CPI was steady.
A Reuters poll of 18 economists forecast CPIX would slow to 12,5% year-on-year and quicken slightly to 0,3% month-on-month.
Mike Schussler, an economist at T-Sec, said it was a ”pretty good number”.
”It indicates that there is a chance we may see a
rate cut. We are now 120 basis points below the CPI peak. In November we expect CPI to be lower than 12% and by December lower than 11%. So we are looking at a rate cut in December already, but probably by only 50 basis points. The weak GDP figures on Tuesday have left the door wide open for a
rate cut.”
Carmen Altenkirch, an economist at Nedbank, said it provided further evidence that inflation has ”turned the corner, but the upside risks remain due to
the weaker rand”.
”In any case, it puts pressure on the Reserve Bank to cut rates earlier than February, but our view is that the bank won’t cut in December because that might give consumers the wrong the message and put undue pressure on the rand.”
Fanie Joubert, an economist at Efficient Group, said: ”CPI, it’s a positive number, better than we expected. It confirms that CPI peaked in August.
”The 12,4% for CPIX, well I doubt that it is enough to convince the Monetary Policy Committee to cut rates in December. We should only see a decrease in rates in February next year.” – I-Net Bridge, Reuters