Transport takes part in inflation figures

ALL THE annual measures of inflation fell in June - but still accelerated on a monthly basis. "This monthly increase had, however, been expected," said the Standard Bank's economics division, "as a result of a number of price surveys that were to be conducted at the beginning of the month. Added to that was the continuation of secondary price pressures." Headline inflation declined to 6,3% year-on-year (y/y) from 6,4% in May - but with a monthly acceleration of 0,5%. The main contributors to this monthly increase were transport (0,2%), medical care and health expenses (0,1%), housing (0,1%) and personal care (0.1%). The main drivers of the annual increase in the headline consumer price index (CPI) were once again the housing, transport, medical care and health expenses and food categories. The SA Reserve Bank (SARB) targeted measure, CPIX, fell to 6,4% y/y compared with the previous month's 6,5% - and accelerating by a milder 0,4% month-on-month (m/m). Core inflation also fared better in June, slowing to 7,6% y/y from May's 7,8%. But month-on-month pressure was higher in this measure than in others - with core accelerating by 0,6%. Looking ahead, the Standard suggested that headline CPI should be aided by the higher base established in the second half of 2000. "The fact that global oil prices are set to remain at lower levels - at least for the current quarter - also bodes well for inflation," it said. "However, the rand's recent volatility will put some pressure on inflation and on the SARB's ability to meet its inflation target next year."