NMG Mercado is out [23 February 2015]: The budget speech and inflation in the spotlight

South African citizens eagerly await Finance Minister Nhlanhla Nene’s budget speech on Wednesday. The speech is supposed to detail plans regarding government’s fiscal consolidation plans and the possible tax increases. It is expected that government will increase the tax on wealthy citizens, and the fuel tax levy is also expected to increase given the cut in fuel prices that South Africans have recently experienced. In other news South African inflation dropped from 5.3% to 4.4% on a YoY basis. On a MoM basis the prices of goods slowed by 0.2%. The major drivers of the drop were low food and non – alcoholic beverages inflation which is currently at 6.5%, down from 7.5% in December 2014 and transport inflation dropped from 1.7% in December 2014 to -2.5%.

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Week 9 2015