Pretoria - The Consumer Price Inflation (CPI) in January rose slightly to 3.7 percent in line with market expectations, Statistics South Africa (Stats SA) said on Wednesday.
Inflation was 0.2 percent higher than the 3.5 percent recorded in December. On average prices, increased by 0.4 percent between December 2010 and January 2011.
Bloomberg consensus was that CPI would rise to 3.7 percent, with Absa Capital earlier today saying it would keep a close eye on food prices within the CPI basket - seeing that January not only has a seasonal kick to it but that base effects are likely to play a part.
The food and non-alcoholic beverages index increased by 2.2 percent between December 2010 and January 2011. The transport index increased by 0.5 percent between December 2010 and January 2011, mainly due to a 29c/l increase in the price of petrol. The annual rate increased to 2,5 percent in January 2011, from 1.6 percent in December 2010.
"The main drivers were food and non-alcoholic beverages as well as transport, which reflected mainly the higher fuel prices. Inflation remains subdued, benefiting from lower import costs on the back of the relative strength of the rand and weak foreign demand, discounting by domestic retailers and moderate services inflation," the Nedbank Economic Unit said.
Both Absa Capital and Nedbank expect CPI to rise steadily during 2011.
"We expect CPI to ... end the year just above 5 percent, partly due to the low base established in the second half of 2010, while rising food and fuel costs will also add upward pressure. The expected increase in CPI during this year is not likely to provoke an earlier tightening of monetary policy," said Nedbank.
