Economists concerned at possibility of rate increase
An economist believes
inflation worries might push the South African Reserve Bank to raise interest
rates again.
Dawie Roodt has been
commenting on the latest rise in consumer inflation.
The CPI climbed to 5.4% in September from 4.8%, with food and fuel among the main contributors.
Roodt says the increase in the inflation rate did not come as a surprise.
ALSO READ: Consumer inflation rises to 5.4%
"Most economists expected an acceleration in the inflation rate. I also expected an increase in the inflation rate, although the increase was a little bit less than what I had expected. And the inflation is more likely to remain in these kinds of levels in the next couple of months.
"But I'm afraid to say the increase in the inflation rate and also the outlook for inflation is more likely to prompt the Reserve Bank to increase interest rates again."
"So, in next month's meeting, I’m afraid to say the Reserve Bank may decide to increase interest rates again by 25 basis points.”
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