JOHANNESBURG, 18 OCTOBER 2017 – The Consumer Price Inflation (CPI) figures released by Statistics South Africa earlier today place the Reserve Bank in a difficult position on whether or not to continue implementing a more gradual policy stance, Steel and Engineering Industries Federation of Southern Africa economist Marique Kruger said today.
She was speaking following Statistics South Africa’s disclosure that the annual consumer price inflation was 5,1 percent in September 2017, up from 4,8 percent in August 2017, indicting a 0,5 percent month-on- month increase in September 2017.
“The latest figures were the second consecutive year-on- year increase since inflation was at a low of 4,6 percent in July 2017, matching the lowest figure recorded almost two years ago. The latest figures were also the sixth consecutive reading that had fallen within the Reserve Bank’s target range of 3 percent to 6 percent,” Ms Kruger said.
She said the inflationary trend was largely assisted by the recent increase in oil and petrol prices and a weakening exchange rate. She said these factors also accounted for the increase in inflation numbers. This has concomitantly led to an increase in transportation costs and the cost of doing business for the companies in the M&E sector in particular.
“Increasing petrol prices, the volatile rand and high policy uncertainty are expected to continue to play into the inflation figures for the coming months, leading to the ANC national policy conference in December 2017. Therefore, inflation will be of great concern to the South African Reserve Bank, which is keenly watching local and international developments,” said Ms Kruger.
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