February 25, 2004

Johannesburg - South Africa's consumer price index showed CPIX inflation had risen 4.2 percent in January compared with a four percent in December, Statistics South Africa said on Wednesday.

CPIX inflation (headline inflation excluding mortgage costs) rose 1.1 percent month-on-month compared with a 0.1 percent increase in December.

The main contributors to the rise were annual increases in housing (excluding mortgage bond interest rates), medical care and health expenses, food, household operation, and education, Stats SA said in a statement.

Year-on-year headline inflation - also known as the consumer price index (CPI) - dropped to 0.2 percent last month from 0.3
percent in December. 

"Interest rates on mortgage bonds decreased by 5.5 percent from January 2003 to January 2004. This mainly accounts for the significant difference between the inflation rates in the CPI and CPIX," Stats SA said.

The December core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, rose 4.7 percent year-on-year from 4.5 percent the prviosu month.

The CPIX, which is used by the South African Reserve Bank (SARB) for its inflation target, was expected to ease to a record low 3.9 percent. This would put the figure below the mid-point of the Reserve Bank’s target range for the fourth month in a row. - Sapa and Staff writer