The Consumer Price Index increased by 5.9% year-on-year in February 2013, Statistics SA data showed today. Consensus economists expected an increase of 5.6%.
Readers of this blog should have been anticipating the acceleration. I’ve been predicting this for nearly a year now, and my timeline has been pretty accurate even if I say so myself. See this post for the details of those predictions.
Despite that, the Reserve Bank kept the interest rate that it manipulates unchanged at 5%. By doing so, the Reserve Bank continues to fuel major economic imbalances in this economy. That means expect a weaker Rand, rising prices, and ultimately a very painful liquidation of malinvestments in the economy that will express in a business cycle crash.