By Lehlohonolo Lehana.
The annual consumer price inflation is still heading higher – reaching 7.1% in March, up from 7.0% in February, according to the latest data from Stats SA
Economists had anticipated a move in the opposite direction, with many forecasting a slight drop to 6.9%.
The main contributors to the 7.1% annual inflation rate were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and services.
Food and non-alcoholic beverages increased by 14.0% year-on-year, and contributed 2.4 percentage points to the total.
Housing and utilities increased by 4.0% year-on-year, and contributed 1.0 percentage point.
Transport increased by 8.9% year-on-year, and contributed 1.3 percentage points.
Miscellaneous goods and services increased by 5.9% year-on-year, and contributed 0.9 of a percentage point.
In March the annual inflation rate for goods was 9.4%, down from 9.5% in February; and for services it was 4.5% down from 4.6% in February.
It’s still unclear whether the hotter-than-expected inflation rate in March will convince the monetary policy committee (MPC) to hike interest rates even higher at its next meeting at the end of May.
In March, the MPC shocked markets by hiking rates by another 50 basis points after February’s inflation number also surprised on the upside.
Reserve Bank governor Lesetja Kganyago estimated that load shedding is adding 0.5 percentage points to inflation.
The next monetary policy meeting is scheduled for 23 to 25 May.