Pretoria - Average inflation expectations for 2011 eased from 6.1 percent to 5.5 percent in the fourth quarter of 2010, says the Bureau for Economic Research (BER).
The bureau was releasing the results of its expectations survey for the fourth quarter. The South African Reserve Bank commissioned the BER to carry out the survey, which is conducted amongst financial analysts, business executives and representatives of labour unions.
The easing of expectations was due to all social groups lowering their inflation expectations for 2011, the BER said on Tuesday.
"The inflation outlook for 2012 also improved, with the average expectation moderating from 6.4 to 6.2 percent. This represents the third consecutive quarter that inflation projections for 2012 were downwardly revised," said the BER.
Additionally in the fourth quarter of 2010, the average inflation forecast receded to 5.4 percent from 5.7 percent previously.
According to the bureau, analysts are the only group that anticipates inflation to remain within the target band over the entire forecast horizon, while business people forecast inflation to rise from within to above the target.
Trade unions expect inflation to ease marginally in 2011 before accelerating in 2012 but for it to remain above the target range over the whole period.
In the latest survey, households kept their inflation forecast unchanged at 7.4 percent from the previous quarter.
"Overall the average inflation outlook improved during the fourth quarter of 2010, but the trend still suggests that inflation will bottom in 2010 before accelerating through to 2012," said the BER.
