The consumer price index accelerated last month, rising back above the 6% upper limit that the Reserve Bank targets when setting interest rates.
The figure, announced yesterday by Statistics South Africa, was 6.1% after a 5.9% increase in August and a 6% rise in July.
Official data also showed that retail sales growth slowed further in August, deepening the disappointing slowdown reported for July.
Retail sales grew just 0.2% in August compared with a year earlier after the 0.8% increase that was reported last month for July, Statistics SA said.
In terms of the CPI, Bloomberg’s economic consensus was for an increase of 6.2% while Trading Economics forecast a 6.1% rise.
The contribution of the transport component doubled to 0.6 percentage points last month from 0.3 percentage points in August, and the transport index increased 3.5% from a year earlier in September.
“A petrol price hike of 47c a litre is building for November, on higher oil prices as a recovery in the commodity cycle is taking hold in the second half of 2016,” Investec’s Annabel Bishop said yesterday.
She pointed out that food inflation remained high, at 11.6%, but could be expected to ease next year, as improved rainfall eases shortages.
Although inflation has breached the 3%-6% target range for much of this year, the Reserve Bank considers it to be stable and expects it to fall back within the target next year, analysts say.
As a result, monetary policy has tended to focus more on the need to improve economic growth.
“A more benign CPI inflation environment will provide some relief to the financial position of households,” Investec economist Kamilla Kaplan said.
Other figures showed that South African households’ net wealth continued to decline in the second quarter, as debt and purchases became harder to afford and households’ assets performed poorly.
The value of household net wealth in real terms fell by R44.5-billion to R7.063-trillion in the second quarter, the Momentum/Unisa household wealth index showed.
That was lower than economists had expected.
In the retail sector, sales grew 0.3%, while for the three months to August they were 0.9% higher than the year-earlier three-month period.
Analysts said further signs of tough trading conditions and consumers’ ability to spend constrained by high levels of household debt and a tighter lending environment were clearly evident.