Bump on the road for inflation in South Africa – but good news for food prices
South Africa’s inflation jumped marginally higher in August, following four months of consecutive declines.
According to Stats SA, annual consumer inflation jumped from 4.7% in July to 4.8% in August.
Although food and non-alcoholic beverages (NAB) inflation continued to drop, it was not enough to counteract the rise in fuel prices and increases in municipal tariffs.
The monthly change in the consumer price index (CPI) dropped from 0.9% in July to 0.3% in August, Stats SA said
It added that the housing and utilities and transport categories were the main cause of the 0.3% monthly increase, with each contributing 0,1 of a percentage point to the monthly rate.
Food inflation
Annual food and NAD inflation dropped from 9.9% in July to 8.0%. Besides fruit, all food and NAB categories recorded lower annual rates in August.
The bread and cereal category also saw a decline from 13.1% in July to 9.90% in August.
“Several products were cheaper in August compared with July, including white bread, brown bread, maize meal and cereals. Rice put a damper on the party, however, with prices jumping by 3,4% month-on-month,” Stats SA said.
General meat inflation also declined from 5.1% in July to 3.6% in August, and, besides chicken giblets and beef extract, the prices for most beef and chicken products dropped. The price index for meat was also 0.7% lower in August compared to July.
The milk, eggs and cheese category also saw a decline, with the annual rate easing from 14.4% in July to 11,9%. Several products, including fresh full-cream milk, eggs and cheddar cheese, saw price increases, however, condensed milk and custard prices grew.
Despite cooling from July’s print of 18.7%, sugar, sweets, and desserts had the highest annual inflation rate of all food and NAB categories at 18.5% in August.
Although jams and chocolate slabs were cheaper in August, prices for brown sugar, white sugar and ice cream continued to grow.
The annual inflation for alcoholic beverages also declined from 7.8% in July to 6.9% in August. Beer prices and wine prices also subsided by 0.8% and 0.3% from July to August, respectively.
Municipal rates
Stats SA surveys municipal rates in July and August, with the August data concluding the 2023 survey.
Electricity tariffs grew by 15.3% in 2023, far higher than the 7.9% rise in 2022.
“Households paid 9,6% more for water in 2023 after bearing the brunt of an 8,1% rise the year before. Property rates were up by 8,4% following a 4,3% increase in 2022,” Stats SA added.
Residents in the Western Cape saw the largest increases in both electricity tariffs (up 17.0%) and property rates (up 11.0%) in 2023.
Residents in KwaZulu-Natal, however, saw the biggest increases for water (up 14.2%), followed by Gauteng (up 10.0%).
Other big price changes
Fuel prices also jumped by 2.2% between July and August, which lifted the annual rate from -16.8% in July to -11.7%.
Restaurants and hotels saw the second-highest annual inflation rate after food and NAB, with restaurant inflation jumping from 6.5% in July to 6.7% in August.
Meat-based products saw prices increase by 2.9% between July and August, which caused an annual change of 9.8%. Hamburger prices also jumped by 1.2% from July to August, with the annual rate increasing to 6.6%.
Annual inflation for hotel rooms also increased by 2.3% to 5.9% in August.
The graphs below show the products that recorded the biggest price increases in August.
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