CPIX hikes to 8.6%
South Africa's Consumer Price Index excluding mortgage rates (CPIX) has increased by 0.7 of a percentage point to 8.6% on year-on-year for December, according to Statistics South Africa (Stats SA) on Wednesday, 30 January 2008.
This increase of 0.7 was from November's 7.9% in 2007.
On a monthly basis, December's CPIX increased 0.7 percentage point higher compared to the previous month's 0.6% growth, Stats SA said.
“The latest CPI figures have shown further deterioration on the domestic inflation environment with food and oil prices remaining the usual suspects driving inflation higher that the domestic economy,” Russell Lamberti from Econometrix Treasury Management (ETM) told BuaNews, Wednesday.
Asked what factors could stabilise these rates to the accepted margins of the 3 - 6% inflation target, Lamberti said: “In our view, the best thing to do would be to minimize the rise in administering prices and try to target as stable exchange rates as possible.”
He said food remained one of the major contributors to rising price pressures with overall food prices rising by 13.5%year-on-year in December 2007.
“Unfortunately, this continues to impact the lowest income groups the most, whose overall inflation rose to 11% year-on-year compared to 8.8% in the highest income groups,” Lamberti said.
He further said negative growth in prices was recorded in various categories including clothing, footwear, furniture and equipment.
“Clothing and footwear prices fell 8.3% year-on-year in December while furniture and equipment prices were 0.8% year-on-year lower.
“These figures are another sign that domestic consumer demand is not responsible for higher inflation,” said Lamberti.
However, the CPI annual rate for transport which increased to 12% in December 2007 from 8.4% in November 2007.
The other main contributors to the annual increase of 9% in the CPI last year were food, housing, transport, medical care and health expenses, fuel and power, household operations, education and personal care.
These increases were slightly counteracted by a decrease in the price index for clothing and footwear.
The average annual food inflation rate for the historical metropolitan areas for the year 2007 was 10.4%, which was 3.2 percentage points higher than the corresponding overall average annual food inflation rate of 7.2% for the year 2006.
Article published courtesy of BuaNews
