South Africa: Inflation jumps on VAT hike in April
May 23, 2018
Consumer prices rose 0.8% in April from a month earlier, accelerating from March’s 0.4% uptick. April’s print was driven by higher transport prices, although gains were nearly broad-based across categories as VAT hikes came into effect. Meanwhile, core consumer prices—which exclude food and energy prices—rose 0.6% from a month earlier, easing from March’s 0.7% rise.
Inflation jumped to 4.5% from 3.8% a month earlier. Analysts overestimated the effect of the one-point tax hike; inflation came in below their 4.7% forecast, while also landing at the midpoint of the Central Bank’s 3.0%–6.0% target. Core inflation also sped up, rising to 4.5% from 4.1%. On the other hand, annual average inflation eased to 4.6% from 4.7%.
Author: Christopher Thomas, Economist