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Increased inflation could lead to hike in interest rates next month: Economist

todayOctober 18, 2023 53

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Economist, Dawie Roodt, says South Africans could see an increase in interest rates next month due to the hike in inflation.

Statistics SA today announced that the consumer price inflation increased to 5.4% in September from 4.8% in August.

This is the second consecutive increase, bringing the rate to the same level as it was in June this year.

According to the data agency, the main contributors to the increase were food and non-alcoholic beverages; housing and utilities; miscellaneous goods and services, and transport.

Roodt says South Africans should probably expect a 25 basis points increase in the repo rate that’s set to be announced on 23 November.

However, he says, the Monetary Policy Committee (MPC) could consider not hiking the interest rates because of the anticipated drop in fuel prices for next month.

He has also cited the strengthening of the rand as a possible factor that could lead to rates left unchanged.

 

 

South Africans have taken to social media, saying the latest data shows a grim reality for the country.

 

Written by: Nonhlanhla Harris

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