Consumer inflation excluding interest on mortgage bonds (CPIX) – the measure used by the South African Reserve Bank (SARB) for its inflation target - is expected to have increased at a slower 9.9 percent year-on-year in April from the heady 10.1 percent in March, an I-Net Bridge survey has found.

This will however, be the thirteenth month running that CPIX has been above the six percent upper target limit, and will be higher than the 6.3 percent seen a year ago.

Forecasts ranged from 9.8 percent to 10.3 percent, but only two of the ten analysts surveyed saw the increase pipping last month's level.

Statistics South Africa will release the data at 11.30am local time on Wednesday, 28 May.

Headline inflation – the percentage change in the consumer price index – is expected to have increased at an unchanged 10.6 percent, but again surpassing the high levels seen in early 2003 and above the 7.0 percent seen a year ago.

Forecasts for CPI ranged from 10.4 percent to 10.9 percent. Four of the ten economists surveyed saw a higher growth rate than last month.

Analysts at the lower end of the scale point out that while the monthly rise may again be fairly robust, relatively high monthly increases in the base month indices would have culminated in the slight decline.

The usual suspects

A semi-annual adjustment for domestic worker wages is set to add some upside on the month, with the usual suspects – food and petrol – again leading the upside.

Analysts on the high side of the scale feel that non-food and non-oil inflation is expected to play a larger role in the increase, which will be very concerning for the central bank.

Talk has been arising that a woeful CPIX number now may prompt the central bank's Monetary Policy Committee to call an emergency meeting prior to the 12 June one.

The annual average for CPIX was 6.5 percent in 2007 from 4.6 percent in 2006. This is from a far lower 3.9 percent in 2005 and 4.3 percent in 2004. Annual CPI was at 7.1 percent in 2007. The annual average for CPI was 4.7 percent in 2006 from 3.4 percent in 2005 and compared with only 1.4 percent in 2004, which was the lowest annual average since 1958.

I-Net Bridge