Why the CPI for December 2014 Will Fall by More than 0.1% when Stats SA Publish Figures Today
By Vivian Atud
Johannesburg– Sunburst Africa–What: The Consumer Price Index (CPI) tracks the rate of change in the prices of goods and services purchased by consumers. Statistics South Africa (Stats SA) will today release data on the headline CPI for December 2014. We should expect a more than 0.1 percent fall in this figure. The headline CPI (for all urban areas) annual inflation rate in November 2014 was 5, 8% this was lowere than the figure for October by 0.1 percent.
Why: Following the persistent fall in oil prices globally, prices of petrol have fallen in South Africa in recent months and should continue to fall in the near future. This has a direct positive impact on the prices of other consumer products that constitute the CPI basket. South Africa should continue to enjoy CPI value within the 3 to 6 percent target for most of 2015.
So what: Lower CPI is a good thing for the South African consumers and economy –especially for the poor. Lower CPI increases affordability of basic food items. However, huge unemployment and lower economic growth remains a challenge facing the economy and impact negatively on how consumers will benefit from CPI increases.
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