Advertise with

Inflation is hitting the rich hardest, Stats SA's figures show.
Inflation is hitting the rich hardest, Stats SA's figures show.

Surprise dip in inflation offers relief to consumers


By Robert Laing - Jun 22nd 2018, 08:49

Inflation is hitting the rich hardest, Stats SA's figures show.  

Inflation surprised economists by slowing in May to 4.4% from April’s 4.5%.

Inflation was expected to continue its rise from a low of 3.8% reached in March, with an economists’ consensus that average price increases would rise to 4.6%.

"While we expect inflation to increase, we do not foresee a climb to above the Reserve Bank’s 6% upper target range for inflation over the next three years," Nedbank's economics team said in a note e-mailed after Statistics SA released May's consumer price index (CPI) report.

"This relatively benign inflation outlook and the still-weak economy will probably convince the monetary policy committee to delay hiking rates for as long as possible. We forecast that rates will remain unchanged into the second half of 2019 before a mild upward cycle commences."

The food component of CPI showed annual inflation of 3%, down from 3.7% in April, helped by average fruit prices falling 6.4% and bread and cereals getting 4.1% cheaper over the year.

May’s fuel inflation came in at 9.4% from the same month in 2017.

The drop in fruit and cereal prices helped mitigate 7.8% inflation in meat prices and 6.8% inflation in fish prices.

Statistics SA reported that May’s consumer price index (CPI), which was set to 100 points in December 2016, was 107.2 points.

This was 4.4% higher than 102.7 points in May 2017 and 0.2% higher than April’s 107 points.

According to Stats SA, the price of cellphones and other telecommunications equipment fell by a substantial 15.8% over the year.

Stats SA provides average inflation for the country’s population split into 10 income brackets. According to these figures, the rich are suffering from higher inflation than the poor.

South Africans in the lowest “expenditure decile” had inflation of 2.1%. This rose to 4.7% for people in the richest segment.

Business Day 

Related News

SA expected to sow fewer maize hectares than in previous seasons
26/11/2019 - 10:06
South African farmers are expected to sow 2.8% fewer hectares of the food staple maize next season than forecast in October after the planting season was delayed by rains, a Reuters survey of analysts showed.

Tiger Brands still reeling from listeriosis aftershock
26/11/2019 - 09:41
Tiger Brands continued to feel the effects of the listeriosis outbreak in the year to the end of September after the food producer suffered an impairment charge in its value-added meat products (Vamp), following a slower-than-anticipated recovery in the division.

SA on track for third year of moderating inflation
25/11/2019 - 09:41
SA’s largest asset manager Investec says SA is likely to see average inflation of 4.5% in 2020, with price pressure consistently moderating since 2016.

The clever shift SA's economy can make: economist
13/11/2019 - 13:29
Finance minister Tito Mboweni’s medium-term budget gave a blunt presentation of the financial issues facing South Africa and it is clear that government has finally come to grips with reality, says Efficient Group economist Francois Stofberg.

Billions in investments flow in to improve SA's economy
13/11/2019 - 11:30
More businesses have pledged billions of rands in investment to the ailing South African economy at the second investment conference in Sandton.