The Outlook For Inflation
Finweek English|11 June 2021
What is driving higher local consumer prices?
Andrew Duvenage
The Outlook For Inflation

Last month, Statistics SA announced that annual inflation had accelerated to 4.4% in April, up from 3.2% in March, which is slightly higher than the anticipated 4.3%. The last time the consumer price index (CPI) reached similar highs was prior to the Covid-19 lockdown in February 2020 when it reached 4.6% before dropping to 3% in April 2020 and 2.1% in May 2020.

As expected, the South African Reserve Bank (SARB) elected to hold interest rates steady when they met in May given that the CPI figures remain below the mid-point of the inflation target (being 4.5%). Despite the slightly higher than expected inflation figure, the bond market barely blinked and the rand showed similarly little reaction.

When assessing inflation data figures, it is important to remember that they are retrospective or backward-looking. Looking ahead at the inflation rates that lie in our future is arguably a more valuable exercise, particularly if actual inflation turns out to be meaningfully higher or lower than markets had anticipated and the extent to which markets have priced this in.

The difference between the yields on SA government-issued nominal bonds and their duration-matched nominal bond counterparts provides some indication of what the market is currently pricing in.

هذه القصة مأخوذة من طبعة 11 June 2021 من Finweek English.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة 11 June 2021 من Finweek English.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

المزيد من القصص من FINWEEK ENGLISH مشاهدة الكل
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 mins  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 mins  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 mins  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 mins  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 mins  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 mins  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 mins  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 mins  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 mins  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 mins  |
5 November 2021