JOHANNESBURG – South Africa’s headline consumer inflation rose to 4.3 percent year on year in August after ticking up modestly by 0.3 percent month on month from 4 percent in July as food prices persist.
Statistics South Africa (StatsSA) said the main contributors to the monthly increase in the Consumer Price Index (CPI) were food and non-alcoholic beverages, which increased by 0.5 percent month on month.
Housing and utilities also increased by 0.3 percent month on month and contributed 0.1 of a percentage point.
In August, petrol price for both grades 93 and 95 increased by 11 cents per litre and the diesel price decreasing by 13 cents per litre due to the average increase in international product prices for petrol, diesel and illuminating paraffin.
The petrol price increase normally has knock-on effects on the economy as retailers do not absorb these additional costs and prices rise, but rather transfer them to consumers.
This is also negatively impacting public transport costs as well.
StatsSA said food and non-alcoholic beverages increased by 3.9 percent year on year, and contributed 0,7 of a percentage point to the total CPI annual rate of 4.3 percent.
With the exception of fruit and vegetables, hot beverages and the category other foods, broad based price pressures occurred across the month.
Housing and utilities increased by 5.3 percent year on year, and contributed 1.3 percentage points.
Investec chief economist Annabel Bishop said the rise in inflation was partly driven by a rise in the electricity and other fuel costs category, after the energy regulator’s recent hikes in electricity tariffs.
Bishop said CPI inflation outcomes had improved the inflation outlook for South Africa, but risks from food prices persist.
"The consensus expectation was 4.2 percent year-on-year for both CPI inflation and core inflation," Bishop said.
"Risks from higher food price inflation due to the poor weather conditions, particularly on global warming, are apparent for South Africa's CPI inflation outlook."