Finally some good news for inflation in South Africa
Stats SA has published the latest inflation numbers for South Africa, showing annual consumer inflation slowed to 6.8% in April from 7.1% in March.
This is the lowest reading since May 2022, when the rate was 6.5%. The decrease in inflation was also larger than market expectations, where economists pegged 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 its higher levels 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 biggest contributors to inflation, accounting for 2.4 and 1.1 percentage points, respectively. This is followed by housing and utilities (+1.0pp) and miscellaneous goods and services (+0.9pp).
Annual inflation for food and non-alcoholic beverages eased to 13.9% in April from 14.0% in March, but remains exceptionally high.
The bread & cereals price index increased by 20.8% in the 12 months to April, slightly higher than March’s reading of 20.3%, but lower than the recent peak of 21.8% recorded in January.
The milk, eggs & cheese product group recorded an annual price increase of 14.5% – the largest rise in 14 years (since January 2009). The average price of a 2-litre carton of fresh full-cream milk increased from R30.14 to R35.88 in the 12 months to April.
Over the same period, the average price of a kilogram of cheddar cheese climbed from R118.24 to R135.11 and a tray of six eggs from R20.38 to R21.59.
On average, vegetables were 23.1% more expensive in April 2023 compared with April 2022. This is the highest annual rate since November 2007 – more than 15 years ago. Products pushing up the rate include onions (up 52.8%), carrots (up 29.8%), peppers (up 25.0%) and potatoes (up 24.4%).
Coffee lovers are feeling the pinch too. Annual inflation for non-alcoholic beverages was 10.4% in April, the highest rate since January 2010. Products that registered higher than average price changes were ground coffee or beans (up 17.8%), instant coffee (up 14.8%), dairy blends (up 19.2%) and fruit juices (up 16.5%).
Meat and oils & fats are bucking the trend. Those who enjoy their steak will be glad to know that meat inflation slowed for a second consecutive month, cooling to 9.5% from 10.6% in March. Inflation for oils & fats slowed for an eighth consecutive month, tumbling 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 successive month of disinflation in April, softening to 7.6%. This was mainly due to the annual rate for fuel easing to 5.0% – the lowest reading since March 2021 (2.4%).
The purchase of vehicles category carries a weight of 5.9% in the CPI basket. The annual rate for this category increased to 7.2% in April from 7.0% in March. Breaking this down further, used vehicles are 12.9% more expensive than a year ago. New vehicles witnessed slower inflation, with prices increasing by 6.7% over this period.
Sharp monthly price hikes were recorded for traditional reading material, such as newspapers (up 7.5%) and magazines (up 5.6%). This took the annual rate for the books, newspapers & stationery categories from 10.2% in March to 11.5% in April.
The miscellaneous goods & services price index jumped by 1.3% between March 2023 and April 2023. This category was the biggest factor behind the 0.4% monthly rise in the headline CPI, contributing 0.2 of a percentage point. Personal care prices climbed by 1.2% from March 2023.
Some health insurance companies increased prices in April, lifting the health insurance index by a monthly 2.4%.
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