INFLATION has remained under control and within the inflation target range, and growth in the economy has been robust, Reserve Bank Governor Tito Mboweni said today.

Speaking at the conclusion of the final Monetary Policy Committee (MPC) meeting for 2005, at which interest rates were left unchanged, Mboweni said the recent revisions of the GDP data show that the economy has been growing at a faster rate than previously estimated.

The most significant change was to the 2004 growth rate, which is now estimated to have been 4.5%.

"A slightly higher growth rate is expected to be achieved this year, although there are signs that the economy might be losing some of its earlier momentum," he said.

He said at the October MPC meeting, the inflation outlook had deteriorated somewhat, which was a cause for concern. Since then, however, recorded outcomes have been better than anticipated, and the outlook has changed somewhat. However, a number of significant risks remain, he said.

Inflation as measured by the consumer price index for metropolitan and other urban areas excluding the interest cost on mortgage bonds (CPIX) declined to 4.7% in September, and 4.4% in October following its peak of 4.8% in August.

The decline occurred despite the increases in local petrol prices in September and October of 29 and 12 cents respectively.

Since then the petrol price has been reduced by 31 cents in November and 30 cents in December. If petrol price increases were excluded from this index, CPIX inflation in September and October would have measured 3.5% and 3.2% respectively, reflecting a continued absence of marked second-round effects from petrol price increases, he added.

"These more favourable outcomes have been due to a number of factors which partly offset the impact of the petrol price increases. Notable among these were the year-on-year declines in the prices of clothing and footwear, furniture and equipment, and homeowners’ costs."

Year-on-year food price inflation also remained low, measuring 2.5% in October compared to 3.3% in September. Services inflation moved further within the inflation target range, having declined to 5.2% in October, compared to goods price inflation of 4.1%.

Of significance is the fact that administered prices excluding petrol declined to 4.5% and 4.3% in September and October respectively. This can be compared to a rate of increase of 7% in May.

Administered price inflation including petrol amounted to 10% in October.

Production price inflation also reversed its recent upward trend in October when it measured 4.2%, compared to 4.6% in September. Prices of domestically produced goods rose by 3.8% and 3.5% in September and October respectively, while price increases of imported goods amounted to 6.8% and 5.8%.

The food price category continued to exhibit price declines, Mboweni said.