Consumer inflation (CPI) rises to 5.7% in December

Consumer Price Index rose in line with expectations to 5.7% last month compared with December 2011.

The Consumer Price Index (CPI) rose to 5.7% in December, up from 5.6% in November, Statistics South Africa (Stats SA) said on Wednesday.

Month-on-month average prices increased by 0.2% between November and December.

The food and non-alcoholic beverages index increased by 0.2% between November and December.

The following food and non-alcoholic beverages index increased: fruit (4.9%), milk, eggs and cheese (0.8%), hot beverages (0.8%), cold beverages (0.8%), oils and fats (0.7%), meat (0.4%), and bread and cereals (0.2%).

Housing and utilities increased by 0.5% between November 2012 and December 2012, mainly due to a 0.8% increase in actual rentals for housing and a 0.7% increase in owners' equivalent rent.

Analysts had been expecting CPI to increase by 5.7% in December.

According to Stats SA, the official average annual inflation rate was 5.6% for the year 2012.

The country's consumer prices edged higher during December as the Reserve Bank's Monetary Policy Committee (MPC) holds its first two-day meeting for the year. The meeting will conclude on Thursday with an announcement on interest rates.

The central bank uses CPI to target inflation.

In a research note, Nedbank economists said they expected the bank to keep rates neutral for most of 2013 in order to balance weak growth prospects and rising inflationary pressures.

At the last MPC meeting of 2012 in November, the committee kept rates unchanged at 5%.