Headline consumer inflation in South Africa fell to 4.4% year-on-year in August from 4.6% in July, Statistics South Africa announced on Wednesday.
The 4.4% reading was slightly lower than the expected number, which spells good news for consumers in the country.
Economists polled by Reuters had forecast inflation would fall to 4.5%, taking it to the midpoint of the central bank's target range for the first time in more than three years.
This paves the way for a rate cut to be announced by the South African Reserve Bank tomorrow.
In month-on-month terms inflation was at 0.1% in August compared to 0.4% a month before.
Annual consumer price #inflation declined to 4,4% in August from 4,6% in July. This is the lowest inflation print since April 2021.
— Stats SA (@StatsSA) September 18, 2024
Listen here for more: https://t.co/LBDlSkP770#CPI #StatsSA pic.twitter.com/Ibb3f1qZJJ
“ This is the lowest inflation print since April 2021 when the rate was also 4,4%. Lower annual rates were recorded for several product groups, most notably transport, housing, and restaurants and hotels. In contrast, inflation for food & non-alcoholic beverages (NAB) and alcoholic beverages & tobacco edged higher in August,” StatsSA said.
Transport inflation loses steam
All transport-related products recorded softer annual rates in August.
Fuel prices continued to trend downward, declining for a third consecutive month.
The fuel index dipped by 0,5% month-on-month, slowing the annual rate to 1,8%. Motorists using inland 95-octane petrol paid 15c less per litre in August (R23,11) compared with July (R23,26).1
Diesel followed a similar trend, with motorists enjoying a fourth consecutive cut.
The average price for a litre of diesel was R23,23 in August compared with R23,35 the month before. Transport’s influence on overall inflation has waned since mid-2022, when it was the biggest factor behind the rise in the cost of living.
It accounted for 44% of overall inflation in July that year. Fast forward to August 2024, transport accounted for 9%, placing it behind other major contributors such as housing and utilities and food and NAB. In August, housing and utilities accounted for a quarter of the total inflation rate.
Food inflation edges higher
After an 8-month downtrend, annual food and NAB inflation picked up in August, rising to 4,7% from 4,5% in July.
Most product groups registered higher annual rates, including bread and cereals; meat; fish; milk, eggs and cheese; oils and fats and vegetables.
Lower rates were recorded for fruit; sugar, sweets and deserts; and both hot and cold beverages.
Annual bread and cereals inflation quickened for a third successive month.
Products with the largest annual price increases include rice (up 17,3%), pizza and pies (up 10,9%) and hot breakfast cereals (up 7,9%).
The monthly rise in bread and cereals was 0,4%, with notable increases recorded for grain-based products such as bread flour (up 2,1%), brown bread (up 1,3%) and white bread (up 1,2%).
While the meat index increased on an annual basis, prices dipped by 0,4% between July and August.
Several chicken and beef products were cheaper in the month, with notable decreases recorded for fresh whole chicken (down 2,2%), sausage (down 1,7%), chicken giblets (down 1,3%) and beef mince (down 1,3%).
On the other hand, bacon, beef extract, corned beef, fresh chicken portions, ham and biltong were more expensive.
Hot beverage inflation continues to burn. Despite the annual print slipping from 17,6% in July to 17,5% in August, it remains the group with the highest rate among all food and NAB categories.
Instant coffee inflation hit a 19-month high at 22,3%. The average price for 250 grams of instant coffee was R67,37 in August 2024, up from R52,71 in August 2023.
BUSINESS REPORT