Advertise with

Fuel prices were higher but food inflation was helped by lower grain prices.
Fuel prices were higher but food inflation was helped by lower grain prices.

Consumer inflation ticks up, but food inflation slows further


By Tammy Foyn - Sep 20th 2017, 11:15

Consumer inflation picked up as expected in August, as higher fuel prices bit. 

The consumer price index (CPI) rose 4.8% in August from a year earlier, Statistics SA said on Wednesday.

That compares with a 4.6% year-on-year increase in July and expectations that inflation would pick up to 4.9%.

CPI inflation, on which the Reserve Bank bases its 3%-6% inflation target, has been within that band since April this year.

Tamer inflation enabled the Bank to cut interest rates in July for the first time in five years to offer some stimulus to SA’s moribund economy, and a second cut is widely expected when the Bank announces the outcome of its three-day monetary policy committee (MPC) meeting on Thursday.

Wednesday’s numbers will have little bearing on that decision, though, as the Bank bases its decisions on the outlook for inflation, rather than historical data.

One of the main factors in moderating inflation this year has been slowing food price increases. Food inflation spent the better part of a year in double digits, as a severe drought affected production across SA.

The alleviation of the drought in most areas — apart from the Western Cape — has helped food inflation to fall back into single digits, and it has been steady near 7% in the past few months.

It was expected to continue to moderate in August, assisted by a notable decline in grain prices, and this was borne out.

Prices for both food, and for food and non-alcoholic beverages, rose 5.7% from a year earlier, after 6.8% increases in July for both categories.

Breads and cereals prices fell 1.2% in August from a year earlier — after a 2% increase in July.

Electricity and other fuels were 2.1% than in August 2016, and unchanged from July, when Eskom tariff increases took effect.

This category does not refer to transport fuels, which were up 5.7% year on year in August, after a 3.6% fall in July.

The CPI ticked up 0.1% month on month in August, after a 0.3% increase in July from June.

Producer inflation has also been slowing, and in July the producer price index (PPI) for final manufactured goods — the headline figure — rose 3.6% from a year earlier, after a 4% increase in June.
© BusinessLIVE MMXVII 

Read more about: sa economy | cpi | consumer inflation | consumer

Related News

Slight upturn in prospects for SA 2019/2020 stone fruit exports
16/10/2019 - 10:11
The latest forecast for South Africa's stone fruit season points to improved volumes compared to last year although the continued effects of drought in some areas and adverse weather during pollination has impacted the full potential, an industry body said on Tuesday.

SA economy at risk of third-quarter contraction
11/10/2019 - 09:54
Dismal mining and manufacturing figures for August have raised the prospect of a third-quarter economic contraction.

SA's economy enters 70th month of downward cycle
09/10/2019 - 15:50
South Africa’s economy remains stuck in its longest downward cycle since 1945, adding to pressure on the government to implement reforms to lift business confidence and boost growth.

Stats SA’s seasonal adjustment models are part of regular rebasing
08/10/2019 - 10:53
Every year, SA’s economic activity peaks in the fourth quarter (October-December). On the production (or industry) side of GDP, this pattern is driven mainly by three industries: manufacturing; trade, catering and accommodation; and transport, storage, and communication.

Big business urges reforms to help SA economy
02/10/2019 - 13:17
Big business has called on President Cyril Ramaphosa to act urgently and implement short- and medium-term reforms and prioritise growth-enhancing policies to kickstart the economy.