CPI falls to 6.1% in Sept

Wednesday, October 28, 2009

Pretoria - The Consumer Price Index (CPI), used to measure South Africa's inflation, fell to 6.1 percent in September, Statistics South Africa (Stats SA) announced on Wednesday.

This rate was 0.3 percent lower than the annual 6.4 percent rate recorded in August.

"On average, prices increased by 0.4 percent between August 2009 and September 2009," said Stats SA, while indicating that the food and non-alcoholic beverages index increased by 0.1 percent between August and September 2009.

The index's annual rate decreased to 5.6 percent in September 2009 from 6.8 percent in August 2009.

Stats SA said the monthly increase in the food and non-alcoholic beverages index was largely driven by monthly increases in vegetables, other food, fruit, sugar, sweets and desserts as well as milk, eggs and cheese.

However, these were counteracted by monthly decreases of meat, bread and cereals, hot beverages as well as oils and fats.

The housing and utilities index increased by 0.6 percent between August 2009 and September, while the household contents and services index increased by 0.1 percent between August 2009.

The transport index annual rate increased to -1.3 percent in September 2009 from -2.7 percent in August 2009.

Standard Bank economist Danelee van Dyk said the figure was surprising as they had expected a 6.4 percent decline.

She said the decline could be ascribed to the strength of the Rand benefiting prices of imported consumer goods such as furniture.

This was also the consensus of Nedbank economist Isaac Matshego.

"It was below market expectation... in terms of interest rates it does not change the story, the Reserve Bank's MPC said it expected inflation to keep going down and reach the target range in the second quarter of 2010," he said.

He added that the bank still saw room for another rate cut.

The figure could be seen in terms of lower food prices as well as the strength of the Rand, said Matshego, adding that demand conditions are still very weak.

"Demand conditions are still very weak and the December shopping period could be weaker than expected," he said.

Nedbank said it expected the Producer Price Index (PPI) which was at -4 percent in August to come in at -1.9 percent for September when it is released tomorrow.

Most Read