Thursday, January 29, 2009

Inflation drops as fuel prices rise

“Inflation has surprised on the downside, and the real economic data remains dismal, with significant risk of a technical recession early in 2009.”

NVDL: So the insight here is while SA's inflation news is good, it is likelyy to be fleeting/temporary. As fuel prices increase, these increase will be translated back into the prices of all other goods and services, creating upward inflationary pressure again.
SA’s main inflation rates dived more steeply than expected last month, driven by a sharp fall in fuel prices and backing the case for a full percentage point cut in interest rates next week.
The annual rise in the CPIX inflation gauge targeted for monetary policy eased to 10,3% from 12,1% in November — its lowest in nine months — official data showed yesterday.

The headline consumer price index (CPI) — which will replace CPIX as the official inflation target this year — slowed to 9,5% from 11,8% in November.

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