South African Inflation Unexpectedly Quickens to 8.8%

[phantom power]

No discussion of how their recent electricity shortage may be interacting with inflation.

Feb. 27 (Bloomberg) -- South Africa's inflation rate unexpectedly rose in January, reaching its highest in almost five years and keeping pressure on the central bank to leave interest rates at a four-year high.

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Inflation has exceeded the central bank's 3 percent to 6 percent target range since April, prompting the central bank to raise the benchmark interest rate four times last year to 11 percent. Rising energy costs and the rand's 8.2 percent drop against the dollar so far this year may boost inflation, adding to speculation the bank may delay a rate cut, even as growth slows.

``Given expectations of sharp increases in petrol prices in February and March, it points to even higher inflation trends,'' said Monale Ratsoma, an economist at Absa Group Ltd., South Africa's third-largest bank by assets. ``The Reserve Bank's focus is going to be on the longer term outlook for inflation. We expect rates to remain flat this year.''

http://www.bloomberg.com/apps/news?pid=20601116&sid=aZbegdIZf2Po&refer=africa