{"id":331363,"date":"2019-07-25T14:54:52","date_gmt":"2019-07-25T12:54:52","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=331363"},"modified":"2019-07-25T14:54:52","modified_gmt":"2019-07-25T12:54:52","slug":"this-chart-shows-whats-driving-inflation-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/331363\/this-chart-shows-whats-driving-inflation-in-south-africa\/","title":{"rendered":"This chart shows what’s driving inflation in South Africa"},"content":{"rendered":"

Data from StatsSA out this week showed that headline consumer price inflation (CPI) remained unchanged at 4.5% while core inflation inched higher to 4.3% in June 2019.<\/span><\/p>\n

The main contributors to headline inflation included housing and utilities, transport and food, which added 1.2%, 0.8% and 0.6% respectively in June 2019, said the Macro Research team at Momentum Investments.
\n<\/span><\/p>\n

Administered price inflation slowed to 6.9% (below the 7.1% average), driven by a softer contribution from fuel prices.\u00a0 <\/span><\/p>\n

Momentum noted that inflation in most administered prices breached the 6% upper limit, led by water and services showing a 10.9% year on year increase in June 2019, followed by public transport, which was significantly effected by petrol prices.<\/p>\n

Services inflation remained within the target range of 3%-6%, while food inflation rose above the lower band of the target range to 3.2% in June 2019 from 2.8% in May 2019, largely driven by an uptick in meat prices.<\/span><\/p>\n

The petrol price increased nine cents per litre in June 2019 – and represented the main driver of transport’s 0.8% contribution to the headline figure, the economists at Moment Investments said.<\/p>\n

The fuel price grew by “a softer” 7.4% year-on-year, from 11.4% in May 2019.\u00a0 “This will likely have a reveres effect in July as the petrol price declined at the start of the month,” Momentum said.<\/p>\n

The Reserve Bank revised its assumption for the Brent crude price downward to $67 per barrel in 2019, from $69, while it kept its assumption for 2020 and 2021 unchanged at $68.<\/p>\n

The Central Energy Fund, the economists said, has under-recovered the price by 12.6 cents per litre for the period between 28 June and 23 July 2019, supported by a more resilient exchange rate. Therefore a mild cut in the price of petrol is expected in August.<\/p>\n

Momentum Investments expects inflation to remain contained close to the midpoint of the target range in 2019 and 2020 on weak demand-pull price pressures. <\/span>“In Momentum Investment’s view, low growth and well behaved inflation outcomes leave the door open for a further reduction in the interest rates,” it said.<\/p>\n

The cycle, it said, is likely to remain shallow, given the need to boost growth through the implementation of structural reforms, rather than through more aggressive monetary policy stimulus.<\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

\n

Read: These 3 graphs show why analysts think the rand could crash to R20 to the dollar<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Momentum Investments expects inflation to remain contained close to the midpoint of the target range in 2019 and 2020 on weak demand-pull price pressures.<\/p>\n","protected":false},"author":10,"featured_media":260913,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[26,3137],"class_list":["post-331363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline","tag-momentum-investments"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/331363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=331363"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/331363\/revisions"}],"predecessor-version":[{"id":331407,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/331363\/revisions\/331407"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/260913"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=331363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=331363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=331363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}