Pretoria, South Africa- South Africa has recorded its highest annual consumer inflation in 13 years which is now sitting at 7.4 percent.
According to Statistics South Africa (StatsSA), this is the highest Consumer Price Index (CPI) since May 2009 when the rate was at 8 percent.
The main driver of inflation in the country has been higher food and fuel prices with consumers set to face further price pressures after municipal rates also increased this month.
Prices of food and nonalcoholic beverages increased by 8.6 percent year-on-year in June. This is the highest annual rate for food and beverages since March 2017 when the country was recovering from a severe drought.
Bread and cereal products recorded an annual rate of 11.2 percent, up from 8.4 percent in May. The monthly increase was 2.6 percent with notable price rises for maize meal (5.2 percent), brown bread (3.2 percent) and macaroni (3 percent).
Meat prices increased by 9.5 percent in the 12 months to June, slightly higher than the 9.4 percent recorded in May. Large price increases are widespread across the group, with polony recording the highest annual increase (19 percent).
The index for oils and fats registered an annual increase of 32.5 percent compared with 26.9 percent in May. This product group has seen sustained levels of high inflation, with annual increases above 20 percent since May 2021.
Transport goods and services recorded an average annual price increase of 20 percent and a monthly rise of 4.2 percent. Fuel prices were up by 45.3 percent in June, representing the largest annual increase for fuel since the CPI series began in 2009.
Used vehicle prices surged from -2.9 percent in May 2020 to reach 11.1 percent in June. Public transport prices increased by 14.3 percent from June 2021 and 4.3 percent from May 2022. Monthly increases were recorded for taxi fares (2.7 percent), airfares (7.1 percent) and long-distance buses (11.7 percent).
“Many countries around the globe have experienced rising inflation in recent months, making it a hot topic for debate, particularly in the area of monetary policy,” said StatsSA.
However, Nedbank economists have cited that South Africa’s latest inflation numbers are likely the peak in the current cycle, and the figures are expected to moderate towards the end of the year.
“The acceleration in inflation in June was exaggerated in part by the fact that it was a survey-heavy month. Inflation is probably close to peaking in the current cycle. It will remain elevated in July, mainly due to another high increase in the petrol price (10.6 percent month on month). After that, it is likely to start moderating gradually off a high base to end the year around 7 percent,” said Nedbank economists.
