South Africa's August inflation rises to 6.4%

South Africa's Consumer Price Index (CPI), a measure of inflation, grew 6.4 percent year- on -year in August, the Statistics South Africa (Stats SA) announced on Wednesday. It was 0.1 percentage point higher than the corresponding annual rate of 6.3 percent in July, being well above the central bank Reserve Bank's target of between 3 percent and 6 percent. Some economists had previously forecast that the inflation in August would be 6.45 percent. The main push factor behind the rising August inflation was an 8.7 percent increase in transport costs, said the Stats SA. "The increase was mainly driven by the higher petrol price in August," the South African economic analyst Carmen Nel said. Nel believed that it was not really a surprise as the CPI has been in a position of uptick in the recent months. It is expected that the inflation would fall into the target range set by the central bank following petrol price cuts in South Africa by year-end. "The CPI is likely to fall back below 6 percent year-on-year in the fourth quarter," said the economic analyst Annabel Bishiop on Wednesday. The August CPI announcement came just one day before the Reserve Bank will announce its latest decision on the interest rate. The rising inflation, low consumer and business confidence combined with weak domestic demand continue to plague the economic growth in South Africa. A Nedbank economist predicted that the annual economic growth in South Africa in 2013 is 2.1 percent year on year versus 2.5 percent year on year in 2012.