Headline consumer inflation softened for a second month in a row in July, edging lower to 4.6 percent year-on-year from 4.9 percent in June, Statistics South Africa (StatsSA) said today.
This was in line with market expectations and slightly above the 4.5 percent midpoint of the South African Reserve Bank’s inflation target band 3 to 6 percent.
StatsSA said prices slowed mostly for food and non-alcoholic beverages, housing and utilities, transport, and miscellaneous goods and services.
StatsSA’s chief director for price statistics, Patrick Kelly, said the main drivers of inflation in July were alcohol, fuel and medical insurance.
Municipal service charges also increased following the hike in tariffs by Eskom at the beginning of the municipal financial year.
“The food and non-alcoholic beverages was the largest contributor to annual inflation, as price rises remained steady at 6.7 percent, unchanged from June and May,” Kelly said.
“Meat, oils and fats continued to exert upward pressure, with meat prices rising by 9.4 percent over the past 12 months. This rate has steadily climbed since August 2020 and is currently at its highest level since March 2018.
“Inflation for oils and fats also continues to escalate, reaching an annual rate of 22.4 percent, the highest in almost 10 years.”
On a monthly basis, StatsSA said consumer prices inched up 1.1 percent, the most in a year, following a 0.2 percent rise in June.
Prices for alcoholic beverages rose by 1.7 percent between June and July, the highest increase since March 2019, mainly caused by a 3.8 percent increase in wine prices. This was when restrictions on the sale of alcohol were lifted.
Fuel prices also increased by 1.7 percent between June and July, bringing the annual rate to 15.2 percent, down from June’s reading of 27.5 percent.