ECONOMY: Inflation Above 6% Expectation
Recent Western Cape Business News
The Stellenboch research unit, the BER, reports the average inflation expectation for 2012 remained at 6.1% during the second quarter. It is the third consecutive quarter that expectations in respect of 2012 have remained unchanged at this level.
Respondents lowered their 2013 inflation forecast by 0.1 percentage point to 6.0% (the same level it was during the fourth quarter of 2011), only to raise their 2014 forecast from 6.0% previously to 6.1%.
On average, respondents expect inflation to move largely sideways – from 6.1% in 2012 to 6.0% in 2013 and then reverting back to 6.1% in 2014.
The different social groups diverged in the way they changed their outlook between the first and second quarters. Analysts became the only group to project inflation to remain below the 6% upper limit of the inflation target over the entire forecast horizon. They foresee inflation declining from 5.9% in 2012 to 5.3% in 2013 and then remaining at that level in 2014, the BER reports.
The other two social groups, business people and trade unions, continued to anticipate inflation to exceed the 6% upper limit for all three years forecasted. Business executives still see inflation to average 6.2% during 2012, before rising to 6.3% in 2013 (downwardly revised from 6.5% previously). Headline CPI inflation is then expected to further edge up to 6.4% during 2014.
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