Slight increase in consumer inflation
Stats SA says headline consumer inflation rose to 4% in December, up from 3,6% in November last year.
This is still comfortably inside the South African Reserve Bank’s target range of between 3 and 6%.
StatsSA says the main contributors to the slight increase were food and non-alcoholic beverages, as well as housing and utilities and transport.
Chief economist at Investec Annabel Bishop says the uptick in inflation comes as no surprise.
"The key point is that we are finding ourselves in an environment where the inflation has been quite low and falling over 2019.”
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StatsSA says food and non-alcoholic beverages increased by 3,9% year-on-year and contributed 0,7% of total CPI, with Bishop pointing out that there is typically an increase in food, housing utilities and transport prices over December.
The low inflation rate was one of the reasons why the Reserve Bank’s Monetary Policy Committee decided to cut the repo rate by 25 basis points last week, but Bishop doesn’t expect another cut at the next meeting in March.
"And of course, with the inflation rate at 4% and the repo rate at 6.25%, that gives a real interest of about two and quarter per cent which is low interest rate perspective," she says.
Listen to Bishop below: