THE expectations for the Consumer Price Index inflation outcome for 2011 among markets and most economies, along with the Reserve Bank, is that inflation will not breach its target range, economists said yesterday.

Investec group economist Annabel Bishop said inflation was expected to average the year close to the midpoint of the target and run-up toward 5percent in 2012.

The CPI reflects the price of a representative basket of consumer goods and services. This index measures the impact of inflation on the average consumer.

Bishop said food price pressure, a key driver of CPI inflation, "could prove to be one of the risks to the currently assumed benign CPI inflation outlook in 2011 and 2012".

"Late rains have negatively affected some areas of agriculture, and the patchy weather conditions of late 2010 will have been compounded by the well above average rainfall of December ... to date," she said.

Bishop said another risk which could push the 2011 CPI outcome higher is administered price inflation.

"Hefty electricity tariffs hikes are set to continue.

"Increases over and above this would threaten the CPI outlook, as would above inflation property rates and taxes hikes, water tariff increases and other municipal charges.

"These have already seen price increases of such an excessive extent that the CPI inflation would be at the upper limit of the inflation target range of 6percent year-on-on year, were it not for the rand's substantial strength," she said.

"Should another one of the over indebted advanced economies become bankrupt, particularly the very large economies of Spain or Italy, the heightened levels of international risk aversion could cause a prolonged weakening in the rand."