Global Courant 2023-05-24 13:37:34
Stats SA has released the latest inflation figures for South Africa showing that annual consumer inflation has slowed to 6.8% in April from 7.1% in March.
This is the lowest level since May 2022, when the percentage was 6.5%. The fall in inflation was also greater than market expectations, with economists setting the rate at 6.9%.
However, the inflation rate remains outside the South African Reserve Bank’s target range of 3% to 6%.
Core inflation – excluding food and non-alcoholic beverages and fuel and energy – also remains at the higher level at 5.3%.
The monthly change in the consumer price index (CPI) was 0.4% in April 2023, the group said.
Food and transport remain the largest contributors to inflation, with 2.4 and 1.1 percentage points respectively. This is followed by housing and utilities (+1.0 pp) and miscellaneous goods and services (+0.9 pp).
The annual inflation rate for food and non-alcoholic beverages decreased from 14.0% in March to 13.9% in April, but remains exceptionally high.
The price index for bread and cereals increased by 20.8% in the 12 months to April, slightly higher than March’s 20.3%, but lower than the recent peak of 21.8% in January.
The milk, eggs & cheese product group recorded an annual price increase of 14.5%, the largest increase in 14 years (since January 2009). The average price of a 2-litre carton of fresh whole milk increased from R30.14 to R35.88 in the 12 months to April.
During the same period, the average price of a kilo of cheddar cheese rose from R118.24 to R135.11 and a bowl of six eggs from R20.38 to R21.59.
On average, vegetables were 23.1% more expensive in April 2023 than in April 2022. This is the highest annual figure since November 2007 – more than 15 years ago. Products driving up the rate are onions (+52.8%), carrots (+29.8%), bell peppers (+25.0%) and potatoes (+24.4%).
Coffee lovers are also feeling the pain. Annual inflation for non-alcoholic beverages was 10.4% in April, the highest rate since January 2010. Products that registered more than average price changes were ground coffee or beans (+17.8%), instant coffee (+14.8 %), dairy blends (up 19.2%) and fruit juices (up 16.5%).
Meat and oils & fats go against the trend. Those who love their steak will be happy to know that meat inflation slowed for the second straight month, cooling from 10.6% in March to 9.5%. Inflation for oils and fats fell for the eighth consecutive month, from 16.0% in March to 9.9% in April. The last time this rate was in single-digit territory was November 2020.
Other notable price shifts in April
Transport recorded its ninth consecutive month of disinflation in April and weakened to 7.6%. This was mainly due to the annual fuel cut rate to 5.0% – the lowest level since March 2021 (2.4%).
The vehicle purchase category has a weight of 5.9% in the CPI basket. The annual rate for this category increased from 7.0% in March to 7.2% in April. Breaking this down further, used vehicles are 12.9% more expensive than a year ago. New vehicles saw lower inflation, with prices rising 6.7% over this period.
Strong monthly price increases were recorded for traditional reading material, such as newspapers (+7.5%) and magazines (+5.6%). As a result, the annual rate for the books, newspapers and stationery categories rose from 10.2% in March to 11.5% in April.
The price index for various goods and services increased by 1.3% between March 2023 and April 2023. This category was the largest factor behind the 0.4% monthly increase in overall CPI, contributing 0.2 percentage point. Personal care prices increased 1.2% from March 2023.
Some health insurers raised prices in April, driving the health insurance index up 2.4% monthly.
Read: South Africa is fighting a losing battle
