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South African inflation ticks up: official data

Published on 23/04/2014

Consumer prices ticked ever higher in South Africa last month, official data showed on Wednesday, fuelling speculation about another central bank rate rise.

Statistics South Africa reported that the consumer price index rose 0.1 of a point to 6.0 percent in March, on the back of higher food, housing and transport costs.

The rate is at the upper limit of the South African Reserve Bank’s target band.

The bank raised rates by half a point to 5.5 percent in January, signalling another rate hike was on the cards.

The South African economy has been hit by rising prices, slow growth and a vulnerable currency.

In March the Reserve Bank hinted more rate increases would follow in the “medium term.”

“The real policy rate is currently below what can be considered normal in the long run,” Governor Gill Marcus said at that meeting.

Economists at RMB Global Markets on Wednesday put the chance of another increase when the bank meets next month at about 50:50, saying the bank faces a “difficult decision.”

Raising rates could help bring inflation under control but could also stymie growth.