Dec. 14 (Bloomberg) -- South Africa’s inflation rate rose to 6.1 percent in November, breaching the central bank’s target range for the first time in almost two years, as a weaker rand boosted import costs.
Inflation in Africa’s biggest economy accelerated from 6 percent in November, the Pretoria-based statistics office said on its website today. Prices rose 0.3 percent in the month. The median estimate of 20 economists was for inflation to reach 6.2 percent. The central bank aims to keep inflation inside a band of 3 percent to 6 percent.
“The weaker exchange rate and the pass through from elevated commodity prices, plus the continued rise in administered prices, are still the main culprits,” Shireen Darmalingam, an economist at Standard Bank Group Ltd. in Johannesburg, wrote in a note to clients before the data was released. “The higher inflation outlook will continue to pose a challenge to monetary policy.”
The Reserve Bank has kept the benchmark rate at a 30-year low for a year as it seeks to stave off the impact of a possible recession in Europe because of the deepening debt crisis, even as price pressures increased. Europe buys about a third of South Africa’s manufactured exports. The rand’s 20 percent decline against the dollar this year has added to inflation, reducing room for the Reserve Bank to cut rates to boost growth.
Economic growth stalled at 1.4 percent in the third quarter, little changed from the almost two-year low of 1.3 percent in the previous three months.
The inflation rate will likely peak by March and remain outside the target range until the fourth quarter, Reserve Bank Governor Gill Marcus said on Nov. 10.
“The committee is concerned that the change in the profile of the inflation forecasts, and the extended breach of the upper end of the inflation target range, may impact adversely on inflation expectations,” she said.
The inflation rate will probably average 6.1 percent next year, according to a survey of analysts, business executives and labor unions conducted by the University of Stellenbosch. The survey had previously forecast inflation of 5.9 percent for 2012.
The government raised gasoline prices 2.2 percent in November as the rand weakened. Corn, a staple food in South Africa, jumped 4.9 percent in November.
--With assistance from Simbarashe Gumbo in Johannesburg. Editors: Gordon Bell, Karl Maier
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