‘Most SA professionals expect inflation and interest rates to rise in 2016’

Almost three-quarters of South African professionals don’t trust historic inflation figures and four out of five reckon the rate will increase this year.

That’s according to the results of a survey conducted by the head of the Wits School of Economic and Business Sciences‚ Professor Jannie Rossouw‚ released just minutes ahead of Statistics SA’s Consumer Price Index (CPI) announcement on Wednesday morning.

The “average annual inflation for 2015 was 4.6%‚ down from 6.1%” the previous year‚ Stats SA said.

Rossouw said that his “research data shows that historic inflation figures lack credibility”.

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“People simply do not trust the historic figures as they perceive prices to general to increase more rapidly than the price increases reported by the official inflation rate‚” he said of the results of the survey which had 4100 respondents.

“At the same time‚ inflation is expected to accelerate next year.”

The respondents were asked two questions.

To the first - “whether they believe that historic inflation in South Africa was accurately recorded” – 72% of respondents said they think “prices increase more rapidly or much more rapidly than the rate of inflation”.

To the second – in which “respondents had to state their expectation of future inflation” – 80% of “respondents expect an acceleration in inflation during 2016”.

“The implications are clear: Professional South Africans expect higher inflation next year and higher inflation will push up interest rates‚” said Rossouw.