South Africa Central Bank Sees New Power Prices Adding to Inflation
- Tariff increases could add 0.75 percentage point to inflation
- Softer U.S. rate cycle will reduce pressure on rand: Naidoo
A pylon tower carries electrical power linesover residential shacks and electrical boxes in the Alexandra township outside Johannesburg, South Africa, on Thursday, Oct. 6, 2016. Eskom Holdings SOC Ltd. is building new electricity stations to end the power cuts that were imposed for about 100 days last year, curbing growth in Africa's most-industrialized nation.
Photographer: Waldo Swiegers/BloombergSouth Africa’s electricity tariff increases could push the inflation rate up by 0.75 percentage point, Reserve Bank Deputy Governor Kuben Naidoo said.
The nation’s energy regulator said last week Eskom Holdings SOC Ltd. can raise electricity prices by 9.4 percent from April 1, taking the total increase to 13.8 percent. That’s almost 50 percent more than the assumption the central bank used in its latest projections for 2019, which forecast inflation will stay below 5 percent this year.