Relief for consumers in South Africa

 ·22 May 2024

Inflation in South Africa eased in April, with the consumer price index (CPI) recording an annual increase of 5.2% in April, down from 5.3% in March and 5.6% in February.

This was in line with market expectations, which saw CPI coming in relatively flat.

While this is a positive move for inflation, the figure is still some way off from the South African Reserve Bank’s (SARB’s) target of 4.5%, and feeds the “higher for longer” narrative on inflation and interest rates.

The central bank has repeatedly noted that it will not move its policy rate lower—heralding a cutting cycle—until inflation is under control and sustainably hitting that target.

Thus, interest rates are likely to remain on hold when the Monetary Policy Committee meets next week after the national elections.

According to Stats SA, housing and utilities, miscellaneous goods and services, food and non-alcoholic beverages (NAB) and transport were the main drivers behind the headline rate in April.

The monthly change in the CPI was 0.3% in April, softer than the 0.8% rise recorded in March.

General food inflation slows, except for vegetables, fruit and hot beverages

Annual inflation for food and non-alcoholic beverages (NAB) moderated further from 5.1% in March to 4.7% in April, representing a fifth consecutive month of decline.

Most food and NAB sub-categories witnessed lower annual rates, except for vegetables, fruit and hot beverages.

On average, vegetable prices increased by 7.4% in the 12 months to April, higher than the 6.0% increase recorded in March. Vegetable products that recorded relatively high price increases include potatoes, frozen potato chips, broccoli and beans.

The annual rate for fruit rose from 3.3% in March to 4.5%, mainly driven by higher prices for bananas and apples. Hot beverage inflation increased marginally from 11.2% to 11.4%. The rates for instant coffee and black tea remain in double-digit territory.

Bread & cereal inflation continued to slow, declining for the 12th consecutive month in April.

The annual rate eased to 4.3% from 5.0% in March. Bread flour, cake flour, ready-mix flour, white bread, pasta, rusks, savoury biscuits and maize meal are cheaper than a year ago. The average price of a loaf of white bread was R18,43 in April 2024, down from R19,07 in April 2023.

On the other hand, sharp price increases were recorded for rice, pizzas and pies, instant noodles, and sweet biscuits. Annual rice inflation accelerated to 26.4% %, the highest reading since May 2009, when the rate was 41.9%.

The annual rate for sugar, sweets, and desserts cooled to 16.8% from 17.8% in March. Inflation for products such as white sugar, brown sugar, chocolates, and jam remains elevated.

Egg inflation recorded its fifth consecutive month of decline after peaking at 39,9% in November 2023, then receding to 25,1% in April 2024.

Except for whiteners, condensed milk, Gouda cheese and fresh cream, most products in the milk, eggs and cheese category recorded lower annual rates in April. This pulled overall inflation for the category down to 8,7% from 10,1% in March.

Other notable price changes in April

The annual rate for restaurants and hotels rose to 7.5% in April from 5.7% in March. Hotel prices jumped by 1.5% between March and April, taking the annual rate for hotels to 10.4%.

Fuel prices increased by a monthly 1.9%, pushing the annual rate to 9.0%. Inland 95-octane petrol was R25.12 per litre in April 2024, up from R22.97 in April 2023.

The graph below shows the products that recorded the most significant annual and monthly price increases in April.

Read: Food security warning for South Africa

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