JOHANNESBURG, Feb19 – South African consumer prices rose 5.8 percent in January, official statistics showed on Wednesday, tipping the scales towards another interest rate rise when the reserve bank next meets in March.
Statistics South Africa reported that consumer prices rose by 0.4 of a percentage point versus December, pushed higher by increased transport and food prices.
The 5.8 percent rate was slightly above consensus and is close to the six percent upper end of the South African Reserve Bank’s target range.
The central bank unexpectedly raised rates to 5.5 percent at its meeting in January, citing concerns about inflation.
Before its rate hike, the central bank had forecast inflation would peak about 6.6 percent toward the end of the year.
The latest figures will add to calls for a further rate rise when the bank meets again on March 25 to 27.
“Despite the fact that the rand has pulled back recently, the inflation outlook remains poor,” said analysts at Nedbank.
“(We) expect that the Reserve Bank will raise rates by 50 basis points at the next Monetary Policy Committee meeting and then keep rates steady until the second half of 2015.”