ECONOMY: Inflation Expectations Increase
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The Stellenbosch BER reports CPI inflation expectations increased unexpectedly during 2009Q2. Average inflation expectations increased by 0.4% points to 8.7% in respect of 2009, by 0.1% points to 8.1% in respect of 2010 and by 0.1% points to 7.9% in respect of 2011.
Analysts made a big upward revision in their inflation expectations for 2009 – from 6.1% in 09Q1 to 6.9%. Business’ inflation expectations increased by 0.2% points to 9.4% in respect of 2009 while trade unions’ inflation expectations remained unchanged at 9.7%. All three groups’ inflation expectations remain well above the upper limit of the inflation target despite the recessionary conditions in the economy.
Analysts’ inflation expectations increased by 0.3% points to 5.7% in respect of 2010, while that of business and trade unions remained unchanged at 8.6% and 10.1% respectively.
Trade unions made an upward adjustment in their inflation expectations in respect of 2011 – from 9.6% to 9.9%; that of analysts increased marginally to 5.6% whilst that of business re-mained unchanged at 8.3%.
Households’ inflation expectations increased from 10.1% in 09Q1 to 10.3% in 09Q2.
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