STATISTICS South Africa yesterday announced that the consumer price index (CPI) had increased to 6% year-on-year in March from 6.3% in February.
Inflation is currently at 6%.
The main pressure on the month came from "sin tax" increases announced by Finance Minister Pravin Gordhan in his budget speech and transport and education cost increases, according to Investec group economist Annabel Bishop.
Bishop said the 28 cent a litre petrol hike also put pressure on the economy while food price inflation was still a significant driver in the overall rise in the cost of living.
"In April the petrol price rose by 71c a litre. This will keep inflation out of the target range in that month, but base effects should wear off in May and global disinflation will help to lower CPI inflation.
"Despite the modest inflation outlook, interest rates would typically have normalised already, but the risks posed by weak global demand have delayed the normalisation process.
"However, we believe the normalisation process will begin this year," Bishop said.
She said interest rates will most likely rise by 50 basis points in November.
Petrol price hike hits economy
STATISTICS South Africa yesterday announced that the consumer price index (CPI) had increased to 6% year-on-year in March from 6.3% in February.
Inflation is currently at 6%.
The main pressure on the month came from "sin tax" increases announced by Finance Minister Pravin Gordhan in his budget speech and transport and education cost increases, according to Investec group economist Annabel Bishop.
Bishop said the 28 cent a litre petrol hike also put pressure on the economy while food price inflation was still a significant driver in the overall rise in the cost of living.
"In April the petrol price rose by 71c a litre. This will keep inflation out of the target range in that month, but base effects should wear off in May and global disinflation will help to lower CPI inflation.
"Despite the modest inflation outlook, interest rates would typically have normalised already, but the risks posed by weak global demand have delayed the normalisation process.
"However, we believe the normalisation process will begin this year," Bishop said.
She said interest rates will most likely rise by 50 basis points in November.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos