CPIX climbs to 7.3%

According to Statistics South Africa (Stats SA), Wednesday, the higher CPIX figure for October 2007 can be explained by increases in the annual rates of change for food, transport, housing excluding interests rates, household operations, medical care and health expenses, education and fuel and power.

These increases were slightly counteracted by a decrease in the price index for clothing and footwear.

Wednesday's CPIX figure is the seventh consecutive breach of the Reserve Bank's inflation target band of 3 to 6% since the inflationary cycle began in June 2006.

Tuesday's Gross Domestic Product figure of 4.7% indicated the South African economy is still growing despite the central bank's tightening monetary policy.

Expansion of the economy, coupled with the rise in the inflation will in all likelihood prompt the Monetary Policy Committee to raise the repo rate a further 50 basis points when they meet next week.

The Reserve Bank has raised lending rates a cumulative 3.5% since June last year in an attempt to control excessive consumer spending.

Article published courtesy of BuaNews