According to Statistics South Africa (Stats SA) the Consumer Price Index (CPI) came in unchanged at 6.6% in June.
Stats SA said, “The headline CPI (for all urban areas) annual inflation rate in June 2014 was 6.6%. This rate was the same as the corresponding annual rate of 6.6% in May 2014.”
Between May and June, prices increased by 0.3%.
According to Stats SA, the food and non-alcoholic beverages index increased by 0.1% between May and June 2014. The annual rate was the same as the corresponding rate of 8.8% in May.
The housing and utilities index increased by 0.9% between May and June 2014, mainly due to a 1.5% increase in actual rentals for housing and a 1.3% increase in owners’ equivalent rent. The annual rate increased to 5.8% in June 2014 from 5.7% in May 2014.
The household contents and services index increased by 1.2% between May 2014 and June 2014, mainly due to a 2.3% increase in domestic workers’ wages. The annual rate increased to 4% in June 2014, from 3.7% in May 2014.
The transport index decreased by 0.1% between May 2014 and June 2014, mainly due to a 22c/litre decrease in the price of petrol.
Nedbank economists say they expect inflation to remain elevated during the remainder of the year and into the first half of 2015 due to the fragile currency.
According to Nedbank, “Next month’s inflation figures will include annual increases for water and electricity, as well as a petrol price increase of over 2%. Next month will also likely signal the peak of the inflation cycle.”
“Global food prices have come off recently, so this is less of an inflation concern and the oil price has remained relatively stable.”
The Reserve Bank’s Monetary Policy Committee (MPC) recently raised the repo rate by 25 basis points in an effort to strike a balance between increasing inflation and a weakening economy.
Stated Nedbank, “The MPC reiterated that interest rates are in a rising cycle and that at some point, they will have to be ‘normalised’. The implication is that the MPC will continue to talk tough but to act as moderately as possible.
“The next hike will probably again be 0.25 percentage points and will probably be in November.”
Source – SAnews.gov.za