Statistics South Africa has published its latest consumer price index, showing that annual consumer price inflation has broken through the upper limit of the Reserve Bank’s target range.
Inflation was recorded at 6.5% in May 2022, up from 5.9% in April 2022.
This is the highest reading since January 2017 when the rate was 6.6%, with inflation now higher than the upper limit of the South African Reserve Bank’s monetary policy target range of 6%, pointing to further interest rate hikes in July.
Transport and food and non-alcoholic beverages (NAB) accounted for just over half of the annual rate, with sharp price increases recorded in both categories. Fuel, in particular, continues to be a major contributor: if the impact of fuel is removed from the CPI reading in May, the headline rate falls to 5.1% from 6.5%.
Diesel prices jumped by 8.1% between April and May, taking the annual rate to over 45%. The average price of a litre of diesel in May 2021 was R16.20 – meaning it costs R729 to fill a 45-litre tank. Twelve months later, with the average price at R23.67 per litre, filling the same tank cost R1,065.
Petrol prices moderated between April and May, edging lower by 0.7%. Despite this decline, petrol is almost 27% more expensive than it was in May 2021.
Some of the largest annual price increases (May 2021 vs May 2022) were recorded for the following goods and services:
- Fuel: +32.5%
- Electricity and other fuels: +14.4%
- Public transport: +12.5%
- Meat: +9.4%
- Bread and cereals: +8.4%
- Wine: +7.9%
- Beer: +7.8%
- Fish: +6.2%
Prices for food and non-alcoholic beverages jumped by 2.1% between April and May, representing the largest monthly increase since February 2016 when the monthly rise was also 2.1%. At that time the country was experiencing a severe drought.
The oils and fats product group continues to witness sustained levels of high inflation. The annual rate was 26.9% in May, representing the 17th month that the rate has been above 10%. Prices jumped by 10.1% between April and May, representing the first time since 1997 that the monthly rate was above 10%.
Sunflower oil, the product with the highest weight in the oils and fats group, is almost 40% more expensive than it was a year ago. Prices jumped by 16.1% between April and May.
The monthly rate for bread and cereals was 3.4%, taking the annual rate to 8.4%. Maize meal recorded a monthly increase of 5.1% and a loaf of white bread was 3.7% more expensive.
Annual meat inflation has remained above the 6% mark since November 2020, with the reading for May 2022 at 9.4%. Prices for individually quick frozen (IQF) chicken portions and stewing beef increased by 13.7% and 12.2% respectively in the twelve months to May.