Consumer Price Inflation surges to 5% in September
South African consumer inflation edged up as expected by economists polled by Reuters. The September number came in at 5 per cent, while month-on-month inflation was accelerated by 0.2 percent. IQ Business Chief Economist, Sifiso Skenjana joins CNBC Africa for more.
Wed, 20 Oct 2021 10:48:19 GMT
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AI Generated Summary
- Rise in consumer inflation in South Africa driven by surge in fuel prices and cost-push factors like utilities and electricity
- Economist Sifiso Skenjana suggests that current inflation trend is transitory and expects easing of pressures by early next year due to improved yields
- Projections indicate that despite better-than-expected economic growth, the Reserve Bank is unlikely to raise interest rates in the near term, with a potential hike expected in the second quarter of next year
South African consumer inflation has edged up as expected by economists polled by Reuters, with the September number coming in at 5%. The month-on-month inflation also accelerated by 0.2 percent. To provide insights into these numbers and break them down further, IQ Business Chief Economist, Sifiso Skenjana, joined CNBC Africa for an in-depth discussion. During the interview, Skenjana emphasized that there were no surprises in the latest set of inflation numbers. The consistent rise in fuel prices, influenced by global oil prices, has been a key driver of inflation in South Africa. With oil prices hitting highs not seen in years, inflation is being primarily fueled by cost-push factors such as utilities, electricity, and fuel. This phenomenon has resulted in core inflation, which reflects demand dynamics, remaining relatively muted amidst the overall inflationary pressure. Skenjana discussed the debate among economists regarding whether this inflationary trend is transitory or sticky. He opined that the current spike in inflation is likely transitory, citing factors such as food inflation and the temporary surge in oil prices. However, he expressed optimism that the forthcoming agricultural season could lead to improved yields, subsequently easing some of the inflationary pressures by early next year.
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