{"id":698399,"date":"2023-06-23T14:30:00","date_gmt":"2023-06-23T12:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=698399"},"modified":"2023-06-23T13:20:46","modified_gmt":"2023-06-23T11:20:46","slug":"downhill-for-inflation-in-south-africa-with-maybe-some-bumps-along-the-way","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/698399\/downhill-for-inflation-in-south-africa-with-maybe-some-bumps-along-the-way\/","title":{"rendered":"Downhill for inflation in South Africa &#8211; with maybe some bumps along the way"},"content":{"rendered":"\n<p>Although fuel prices are expected to increase in 2023, they will not reverse the overall decline in inflation. <\/p>\n\n\n\n<p>According to <a href=\"https:\/\/businesstech.co.za\/news\/lifestyle\/697745\/good-news-for-households-in-south-africa-as-inflation-eases-more-than-expected\/\" target=\"_blank\" rel=\"noreferrer noopener\">Stats SA<\/a>, Consumer Price Inflation dropped from 6.8% in May to 6.3% in April. <\/p>\n\n\n\n<p>This was the lowest reading since the 5.9% recorded in April 2022. <\/p>\n\n\n\n<p>One area that decreased substantially was fuel inflation, which dropped from 5.0% in April to 3.5% in May. <\/p>\n\n\n\n<p>South Africans have been battling skyrocketing fuel prices over the last year, with Russia&#8217;s invasion of Ukraine seeing the prices of fuel skyrocket due to sanctions on the former. <\/p>\n\n\n\n<p>The increase in fuel prices usually sees inflation numbers climb as households have to spend more to fill up their cars, while producers and businesses are affected from a price perspective. <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"ZEDY3Fs2d3\"><a href=\"https:\/\/businesstech.co.za\/news\/business\/696147\/load-shedding-bleeds-one-of-south-africas-biggest-retailers-of-r700-million\/\">Load shedding bleeds one of South Africa&#8217;s biggest retailers of R700 million<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Load shedding bleeds one of South Africa&#8217;s biggest retailers of R700 million&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/business\/696147\/load-shedding-bleeds-one-of-south-africas-biggest-retailers-of-r700-million\/embed\/#?secret=CtLeA5KyWN#?secret=ZEDY3Fs2d3\" data-secret=\"ZEDY3Fs2d3\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>FNB Senior Economist Koketso Mano said that fuel prices will likely increase slightly during the rest of 2023 &#8211; despite a minimal decrease in petrol prices expected in July. <\/p>\n\n\n\n<p>Although the rand had a strong recovery in June, Mano said that the rand may depreciate further in the coming months, affecting fuel prices. <\/p>\n\n\n\n<p>&#8220;The concern is that there are several risk events in the near term that could weigh on the rand, such as the BRICS summit and 2024 elections. In addition, although load-shedding has been less intensive in June, there are still risks that it could intensify beyond stage 6 as winter progresses, she said.<\/p>\n\n\n\n<p>&#8220;These risks should keep the rand undervalued in the coming months, limiting the benefit that could have been reflected in fuel prices.&#8221; <\/p>\n\n\n\n<p>In addition, she said that international product prices may also increase during the year. <\/p>\n\n\n\n<p>&#8220;However, an intensification of the ongoing driving season in the Northern Hemisphere and\/or better news out of China would support demand in the coming months, while some improvement in economic activity should support higher prices going into 2024,&#8221; she said. <\/p>\n\n\n\n<p>Although an increase in fuel prices will limit the deceleration in headline inflation, she does not expect it to reverse the trend of declining inflation. <\/p>\n\n\n\n<p>&#8220;Headline inflation is also supported by positive base effects from the higher base that was created over 2022, when we started to see large rises in inflation following the post-pandemic supply chain disruptions and the war in Ukraine, and this has started to usher in a faster annual deceleration as seen in the May 2023 inflation print,&#8221; she said. <\/p>\n\n\n\n<p>&#8220;In addition, the relatively aggressive hiking cycle that has unleashed 475 basis points worth of interest rate hikes over the past year and a half should be bearing fruit, lowering demand, limiting the scope for suppliers to pass through cost pressures, and assisting the slowing in inflation.&#8221; <\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"6SCdBJPp67\"><a href=\"https:\/\/businesstech.co.za\/news\/finance\/697897\/interest-rate-relief-back-on-the-menu-for-south-africa\/\">Interest rate relief back on the menu for South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Interest rate relief back on the menu for South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/finance\/697897\/interest-rate-relief-back-on-the-menu-for-south-africa\/embed\/#?secret=H2OxIFm218#?secret=6SCdBJPp67\" data-secret=\"6SCdBJPp67\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/698031\/south-africas-economy-not-in-crisis-reserve-bank\/\">South Africa\u2019s economy not in crisis: Reserve Bank<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although the price of fuel is expected to rise in 2023, it will not reverse the trend of inflation declining. <\/p>\n","protected":false},"author":95,"featured_media":644095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-698399","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/698399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=698399"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/698399\/revisions"}],"predecessor-version":[{"id":698469,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/698399\/revisions\/698469"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/644095"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=698399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=698399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=698399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}