Picture: 123RF/BLUE BAY
Picture: 123RF/BLUE BAY

Consumer inflation accelerated slightly in January, driven by higher food prices and services costs, but came in below expectations.

Inflation, as measured by the annual change in the consumer price index, rose to 3.2% in January, from 3.1% in December, Stats SA said on Wednesday.

The median forecast of 17 analysts polled by Bloomberg was for a rise of  3.3%.

Stats SA’s miscellaneous goods and services category, which covers, among other things, insurance, saw a 6.5% rise year on year, contributing one percentage point to the headline figure.

Food and non-alcoholic beverages increased by 5.4% year on year, and contributed 0.9 of a percentage point to the headline figure.

Housing and utilities increased by 2.6% year on year, and contributed 0.6 of a percentage point.

SA’s inflation numbers in early 2021 will be closely watched amid hopes of another Reserve Bank interest rate cut, given that inflation remains below the midpoint of the Bank’s target range of 3% to 6%.

Higher food and international oil prices are expected to put pressure on consumer prices over the short term, but they should remain well below the midpoint of the target range in 2021, NKC African Economics analysts said in a note ahead of the release.

gernetzkyk@businesslive.co.za

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