Consumer inflation picks up slightly in March
CONSUMER prices in South Africa have risen slightly picked up as more consumer activity pushed demand upwards since lockdown restrictions were eased further in March.
Data from Statistics SA (StatsSA) on Wednesday showed that the annual consumer price inflation (CPI) rate rose to 3.2 percent in March from 2.9 percent in February.
This March consumer inflation print was in line with market expectations and moved towards the lower band of the South African Reserve Bank's target range of 3-6 percent.
StatsSA said the main upward pressure came from prices of food and non-alcoholic beverages which rose 5.7 percent in March, from 5.2 percent in February.
In particular, oils and fats products continued to see large price increases, with annual rise of 13.4 percent from 10.6 percent.
“This is the highest rate since October 2016 for this group,” StatsSA said.
“Fuel prices in March 2021 were on average 2.3 percent higher than they were in March 2020. This is the first time in 12 months that fuel prices have increased on an annual basis. “In other words, for the first time in a year, motorists are now paying more on fuel than they were 12 months before.”
StatsSA said housing and utilities increased by 2.2 percent year-on-year while transport increased by 3.8 percent, and miscellaneous goods and services rose by 4.0 percent.
Education inflation is currently at its lowest in 30 years at 4.1 percent, StatsSA added.
On a monthly basis, consumer prices rose by 0.7 percent, matching market expectations.
RMB chief economist Ettienne le Roux said a low base in the second quarter of 2020 coupled with sharply higher energy costs could well see CPI inflation sustaining its upward trend, possibly even reaching 5 percent in coming months.
“There is little reason for alarm however. Beyond a likely short-lived acceleration, the medium term outlook for CPI inflation remains encouraging,” he said.
BUSINESS REPORT ONLINE