Consumer inflation has unexpectedly accelerated slightly for the first time in three months, driven by rising food costs while fuel prices have declined.
Statistics South Africa (Stats SA) today said inflation rose to 7.6% year-on-year in October from 7.5% in September, as the annual rate of increase for food and non-alcoholic beverages edged higher to 12%.
This was the first time headline inflation ticked up since July. It was above market expectations of 7.4% and remained above the upper limit of the South African Reserve Bank’s 3%-6% target range.
On a monthly basis, Stats SA said the consumer price index (CPI) rose by 0.4% in October, compared with a 0.1% increase the previous month.
Stats SA chief director for price statistics Patrick Kelly said bread and cereals, meat and dairy had driven food prices higher.
“The bread and cereals category continues to witness high levels of inflation, with the annual rate increasing to 19.5% from 19.3% in September. Large monthly price increases were recorded for sweet biscuits, macaroni and maize meal,” Kelly said.
“Annual meat inflation also quickened in October, rising to 10.5% from 9.9% in September. Beef prices registered large monthly increases, most notably steak, stewing beef and mince.
“The dairy index, milk, eggs and cheese, registered an annual increase of 10.5%, the highest rate since February 2017. Products recording significant monthly increases include long life full cream milk, fresh full cream milk (and cheddar cheese.”
Data also showed that oils and fat products, which had driven food inflation higher for many months, bucked the trend in October.
The category recorded a second consecutive month of disinflation, with prices falling by 1% after a decrease of 6.1% in September. This took the annual rate to 25.7% from 29% in September.
Meanwhile, Stats SA said fuel inflation continued to decline as used vehicle prices rose in October.
Kelly said the annual change for the transport index was 17.1%, softer than September’s reading of 17.9%.
He however said the annual vehicle inflation climbed to 6.1% from 5.8% in September, on the back of higher used vehicle prices.
“Used vehicles are on average 14.5% more expensive than a year ago, representing the highest annual rate since the current CPI series began in 2009,” Kelly said.
“Lower petrol prices saw the fuel index decline for a third consecutive month. This took the annual rate for fuel to 30.1% in October from 34.1% in September, decreasing further from the 56.2% peak recorded in July.
“A litre of unleaded 95-octane petrol (inland) was R22.36 in October, lower than the record high of R26.74 in July.”
BUSINESS REPORT