Inflation expected to soar, says BER

Stellenbosch University's Bureau for Economic Research (BER) said yesterday in its inflation expectations survey for the second quarter of this year that expectations for CPIX had increased from 7,8percent to 8,9percent for this year.

Stellenbosch University's Bureau for Economic Research (BER) said yesterday in its inflation expectations survey for the second quarter of this year that expectations for CPIX had increased from 7,8percent to 8,9percent for this year.

For next year CPIX, inflation excluding mortgage costs, is seen at 7,9percent compared with previous expectations of 7percent.

In 2010 CPIX is expected to increase to 7,2percent compared with expectations of 6,7percent in the first quarter.

The BER said during the second quarter CPIX inflation expectations in for all forecast years had increased further relative to the first quarter.

"Of the three social groups, analysts revised their forecasts upwards by the biggest margin. They were followed by the business sector.

The trade union movement made the smallest upward revision. In actual fact, they made no change to their 2010 forecast.

"All social groups expect CPIX inflation to decline over the forecast period. This finding stands in contrast to that of the first quarter of this year, when businesspeople and trade union leaders forecast no change in CPIX inflation.

Analysts now expect a 3,8percentage point decline (from 9,6percent to 5,8percent), trade union leaders a 1,0 percentage point decline (from 8,4 percent to 7,4 percent) and business people a 0,5 percentage point decline (from 8,8 percent to 8,3percent) in CPIX inflation between this year and 2010.

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