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Inflation expected to stay stable – SSS

Independent stockbroking firm, Simonis Storm Securities (SSS) , in a recent Inflation Report said they expect inflation to stay stable towards the end of 2015, in the approximate range of 4% – 5 % in December 2015.
This follows the recent inflation figures for September 2015 released by the statistics agency, NSA, showing that the overall inflation eased to 3.3% from 3.4% recorded in August 2015.
Simonis Storm Securities suggested that with the Rand, volatility remains a concern for the medium term. Import inflation, a significant contributor to overall inflation, will continue to put pressure on domestic prices.
Furthermore the firm noted that potential water shortages caused by the poor and erratic rainfall over the last three years continues to be a worry.
“We will only know that towards the end of Q1 2016, water rationing will become a reality. If it does then the water tariffs especially on heavy water consumers (businesses) are likely to rise,” SSS added.
Meanwhile key findings from Simonis Storm Securities suggest that the annual consumer price inflation of 3.3% in September. 2015, indicates marginal relief on price pressures.
Declines were seen in the following categories: Transport inflation further declined by 2.2% year-on-year compared to a drop of 1.3% in August 2015.
Housing, water, electricity, gas and other fuels dropped by 2.3% in September 2015 from 2.4 % recorded in August 2015.
Meanwhile, furnishing, equipment and maintenance; health and clothing and footwear categories also eased by 3.4%, 5.4% and 0.2%.
The CPI for goods only grew by 0.1% m-o-m and by 3.5% on an annual basis, while the CPI for services also grew by 0.1% m-o-m but by 3% on an annual basis.

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