Global| Feb 25 2004Consumer Prices Inflation Modest in France, India and South Africa
Summary
Consumer prices in three disparate countries were reported today for January. Inflation in France and South Africa looks tame while that in India is at least stable at a rate that is quite moderate by historical comparison. The first [...]
Consumer prices in three disparate countries were reported today for January. Inflation in France and South Africa looks tame while that in India is at least stable at a rate that is quite moderate by historical comparison.
The first graph shows the wide swings in India's CPI for agricultural workers; similar movements are apparent in the more recent data available for other worker groups, such as "Urban Nonmanual Workers". The Indian Central Statistical Organization notes that bankers and other users of inflation data now emphasize this latter series, which we show in the table below. It covers living costs for workers in what is probably the most dynamic segment of the Indian labor market, office workers in urban areas.
France's CPI by comparison has been very steady, with an inflation rate around 2%. Most recently, tobacco prices have risen rapidly; the French national statistics office publishes the CPI excluding tobacco, which is seen in the table to have run consistently lower than the total index, lately by 0.6%. So inflation for non-smokers in France is quite modest.
The second graph shows consumer prices in South Africa. We include in the graph a basic short-term interest rate, 91-day Treasury bills. The CPI in South Africa contains mortgage interest costs, so the overall reported inflation performance is strongly related to movements in interest rates. Thus, the recent extraordinarily slow pace of inflation reflects recent interest rate declines; this impact is seen in the "housing" item in the table. Prices of other items are mixed, with current upward pressure coming from beverages and tobacco and transportation services. Overall, though, after a widespread surge in 2002, consumer prices in South Africa have moderated markedly.
| Consumer Price Indexes, % Change | Jan | Dec | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| France - Total | 0.2 | 0.1 | 2.0 | 2.2 | 2.3 | 1.4 |
| Total less Tobacco | -- | -- | 1.4 | 1.6 | 2.1 | 1.3 |
| Clothing | -- | -- | -2.1 | 0.0 | 0.7 | 1.0 |
| South Africa -- Total | -0.1 | 0.2 | 0.2 | 0.3 | 12.4 | 4.6 |
| Housing | -- | -- | -8.5 | -7.4 | 19.5 | -2.6 |
| Clothing | -- | -- | -3.6 | -3.0 | 3.9 | -3.0 |
| India-Urban Nonmanual Workers | 0.7 | 0.7 | 3.9 | 4.0 | 2.8 | 5.1 |
| Agricultural Labourers | 0.9 | 0.6 | 3.8 | 3.4 | 2.9 | 1.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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