Consumer Price Index remains unchanged

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Consumers can breathe a sigh of relief as inflation is surprisingly on the downside contrary to economists’ expectations.

The annual Consumer Price Index (CPI) for February, remained unchanged at 5.7%, from 5.7% in January 2022.

The main contributors to the annual inflation rate came from an increase in food and non-alcoholic beverages, transport, housing and utilities, as well as miscellaneous goods and services.

A Nedbank economist, Candice Reddy says inflation is expected to average 5.6% this year mainly to due supply shortages and higher Brent crude oil prices.

“Another big driving factor could come from China and the lockdowns we’ve seen across the country because of the sporadic restrictions they’re putting on the country which could exacerbate supply chain issues and that could bring up inflation pressures.”

“Our forecast for next year is for inflation to come down to 4.4%, there will still be some base effects because it’s coming off a very high base this year. But it will all depend on how long the war continues for and how long prices remain high, as well as the global monetary policy situation and how far and excessive US monetary policy is tightened,” adds Reddy.

The South African Reserve Bank (SARB) has an inflation target range of 3% to 6%.