ECONOMY: Inflation Going Down
Recent Western Cape Business News
After rising from 6.8% in 2008Q1 to a high point of 8.1% during 2009Q1, average headline CPI inflation expectations in respect of 2010 declined to 7.7% during 2009Q4 and fell further to 6.5% during 2010Q1, according to the BER of Stellenbosch.
After hovering around a level of 7.8% during 2009, inflation expectations in respect of 2011 dropped to 6.7% in 2010Q1.
The 2010Q1 declines can be attributed to the 1½ percentage points’ reduction in the business sector and labour union representatives’ expectations. The inflation expectations of analysts remained by and large steady compared to the previous survey. The lower inflation expectations of the business and labour sector, in turn, could partly be attributed to the decline in last year’s inflation.
On average, respondents expect inflation to accelerate from 6.5% in 2010 to 6.8% in 2012. This upward trend was mainly caused by the rise in analysts’ expectations from 5.5% in 2010 to 5.9% in 2011. The expectations of business people and trade union officials remained almost unchanged over the whole forecast period.
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