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Consumer price inflation set to drop

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Consumer price inflation (CPI) was set to slow to 5.3% year-on-year (y/y) for December 2014, from 5.8% in November, according to Fin24 inflation expert Riyadh Bhyat.

Stats SA will announce the official figures on Wednesday at 10:00, but The Inflation Factory’s (TIF) Bhyat says it should see a decrease of -0.2% month-on-month.

“The CPI has slowed significantly to 5.3% y/y largely as a result of the petrol price decreases,” he told Fin24.

Nomura emerging markets economist Peter Attard Montalto told Fin24 on Monday that the monetary policy committee decision next week would be taken against “likely downward revisions to headline consumer price index forecasts” for the South African Reserve Bank and “probably” accompanied by broadly unchanged growth forecasts.

“We will have to await (January’s) CPI number, but our forecast and other evidence we have suggests that so far there is no pass through,” he said.

Where you'll feel the pinch

The CPI is comprised of 128 individual sub-categories, some of which have had more considerable hikes in inflation.

The Inflation Factory said the tea and coffee sector’s outstripped the 5.3% increase in CPI with tea increasing by 9.6% and coffee by 8.4%.

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