Inflation remains ‘target-friendly’

INFLATION REMAINS benign despite the January increase, according to Standard Bank economist Elna Moolman. In the measures of the consumer price index (CPI) compared to January 2005, core inflation was 4.1%; headline inflation was 4%; and CPIX (the government tool in fixing interest rates) was 4.3%. Food prices continued to rise in January - following evidence of food price pressure, particularly at the agricultural level, since mid-2005 – and other sources of inflation were: housing (contributing 0.5% to CPIX inflation); medical care and health expenses (0.6% toCPIX); and transport (1.2%). “The impact of these increases was mitigated, although only slightly, by clothing and footwear subtracting 0.1% from CPIX and communication subtracting 0.1%.”