Inflation shock for South Africa – and it’s bad news for meat lovers

 ·23 Nov 2022

Inflation in South Africa edged upward in October, countering economist and analyst expectations of prices coming down for the month.

With inflation tracking higher, this dampens hopes that the country would make a speedier return to the South African Reserve Bank’s target range of 3% to 6%, and cements projections of a sizeable interest rate hike on Thursday (24 November).

According to Stats SA, headline consumer price inflation (CPI) was recorded at 7.6% in October 2022, up marginally from 7.5% in September.

The main contributors to the 7.6% annual inflation rate were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and services.

Food and non-alcoholic beverages increased by 12.0% year-on-year, and contributed 2.1 percentage points to the total CPI annual rate of 7.6%.

Housing and utilities increased by 4.3% year-on-year, and contributed 1.1 percentage points.

Transport increased by 17.1% year-on-year, and contributed 2.4 percentage points.

Miscellaneous goods and services increased by 4.8% year-on-year, and contributed 0.7 of a percentage point.

In October, the annual inflation rate for goods was 10.5%, down from 10.7% in September; and for services, it was 4.6%, up from 4.3% in September, Stats SA said.

Food prices climb ever higher

Stats SA noted that bread & cereals, meat and dairy are currently driving food prices higher in South Africa.

The bread and cereals category continues to witness high levels of inflation, with the annual rate increasing to 19.5% from 19.3% in September. Large monthly price increases were recorded for sweet biscuits (5.5%), macaroni (3.1%) and maize meal (1.7%).

Annual meat inflation also quickened in October, rising to 10.5% from 9.9% in September. Beef prices registered large monthly increases, most notably steak (2.5%), stewing beef (1.2%) and mince (1.1%).

The dairy index (milk, eggs & cheese) registered an annual increase of 10.5%, the highest rate since February 2017 (10.7%). Products recording significant monthly increases include long-life full-cream milk (3.5%), fresh full-cream milk (1.8%) and cheddar cheese (1.2%).

Hot beverage prices increased by 14.0% in the twelve months to October, the highest annual reading since February 2017 (14.3%). Instant coffee recorded a monthly increase of 2.1% and black (Ceylon) tea 3.4%.

Oils & fat products, which drove food inflation higher for many months, bucked the trend in October. The category recorded a second consecutive month of disinflation, with prices falling by 1.0% after a decrease of 6.1% in September. This took the annual rate to 25.7% from 29.0% in September.

On a more positive note, fuel inflation continues to decline, the stats body said.

The annual change for the transport index was 17.1%, softer than September’s reading of 17.9%.

Annual vehicle inflation climbed to 6.1% from 5.8% in September on the back of higher used vehicle prices. Used vehicles are, on average, 14.5% more expensive than a year ago, representing the highest annual rate since the current CPI series began in 2009.

Lower petrol prices saw the fuel index decline for a third consecutive month. This took the annual rate for fuel to 30.1% in October from 34.1% in September, decreasing further from the 56.2% peak recorded in July.

A litre of unleaded 95-octane petrol (inland) was R22.36 in October, lower than the record high of R26.74 in July.

Other notable price changes in October include household detergents, which continued to increase, with washing powder reaching an annual rate of 30.3% and dishwashing liquid 16.2%.

Bath soap prices increased by 21.3% and toothpaste prices by 20.8% in the twelve months to October.

Health insurance premiums increased by 4.8% in October 2022 compared with October 2021, higher than the annual reading of 3.5% recorded in September.


Read: Big changes coming for South Africa’s inflation basket

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