Pretoria — The Consumer Price Index (CPI) in April rose to 6.1% – breaching the Reserve Bank’s inflation target range.
“Headline CPI annual inflation rate in April 2014 was 6.1%. This rate was 0.1 of a percentage point higher than the corresponding annual rate of 6% in March 2014,” Statistics South Africa (Stats SA) said on Wednesday.
According to Stats SA, prices rose by 0.5 % on average between March and April 2014.
The food and non-alcoholic beverages index rose by 1.3% between March and April, while the transport index increased by 0.4% between March and April.
The miscellaneous goods and services index increased by 0.4% between March and April 2014. The annual rate increased to 6.6% in April 2014 from 6.5% in March 2014.
The Reserve Bank targets inflation between three and six percent.
Nedbank economists had expected Wednesday’s figure to come in at 6.2%. The bank expects inflation to continue to rise.
“We expect inflation to rise further in the short term and to remain above the Reserve Bank’s 6% upper target range throughout this year and into the first half of 2015 due to a fragile rand and higher food prices,” said the economists.
The Reserve Bank’s Monetary Policy Committee (MPC) will make its decision with regards to interest rates, public tomorrow afternoon.
“The inflation outlook remains poor in the short term. The Reserve Bank has made it clear that we are in a rate-hiking cycle, but the extent and speed will be data dependent. We do not expect the Reserve Bank to raise rates at this Thursday’s meeting, given that the rand has strengthened substantially since the bank’s last meeting. However, given the need to balance growth prospects with higher inflation we anticipate that rates will rise by 25 basis points at two of the following four meetings,” said Nedbank.