Macroeconomic Forecast South Africa

September 2008 | Macroeconomic Forecasts

Inflationary pressures continue to build in South Africa's economy, with CPIX (which excludes interest rates on mortgage bonds) climbing to 13.6% y-o-y in August, up from 13.0% in July and 11.6% in June. Due to ongoing pressures on food and electricity prices, we believe that inflation could experience a potential further lift in September before hitting a peak over the coming months. Despite the recent easing in commodity prices (especially oil) and the expected base effects in the fourth quarter of the year, inflation's strong upside momentum has prompted us to significantly change our year-end target to 10.7% y-o-y (up from our previous projection of 9.1%).

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