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Minister of Cooperative Governance and Traditional Affairs Des Van Rooyen. Picture Credit: Gallo Images
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Falling petrol price helps slow inflation

By unknown | Dec 18, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

November's 45 cents a litre drop in petrol prices helped slow inflation for the fourth month in a row.

But rising food prices saw the consumer price index excluding mortgages (CPIX) come in slightly higher than economists expected at 12,1percent.

The food component of CPIX rose 0,9percent month-on-month, taking it up to 16,9percent year-on-year. Fruit and nuts recorded the biggest jump from October to November, rising 5,5percent, followed by household consumables, which rose 2,9percent.

November's petrol price drop saw vehicle running costs show the biggest monthly deflation of 3,3percent.

End-of-year car sales saw vehicle prices drop 0,4percent.

Dealers tend to cut prices in November and December to entice consumers waiting for the next year's registration date for better resale values.

CPIX, currently used by the Reserve Bank for its interest rate decisions, peaked at 13,6percent in August and has gradually fallen since then. The Bank is switching to the broader consumer price index (CPI) next year, which Stats SA measured at 11,8 percent for November year-on-year.

December's inflation is expected to improve substantially thanks to this month's R1,61 a litre petrol price drop.


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