Annual consumer price inflation (CPI) in South Africa slowed to 6.8% in April from 7.1% in March, driven by easing meat, oils, fats and fuel prices, though increases were experienced in some categories.
This was the lowest reading since May 2022, when the rate was 6.5% and below market forecasts of 7%, giving hope that the SA Reserve Bank will start tapering its monetary policy in the second half of the year when inflation drops within the 3-6% target range.
Statistics South Africa (Stats SA) today said transport recorded its ninth successive month of disinflation in April, softening to 7.6%, mainly due to the annual rate for fuel easing to 5.0% – the lowest reading since March 2021.
Stats SA also said that the annual inflation for food and non-alcoholic beverages eased to 13.9% in April from 14.0% in March.
Prices for meat slowed for a second consecutive month, cooling to 9.5% from 10.6% in March.
Inflation for oils and fats slowed for an eighth consecutive month, tumbling from 16.0% in March to 9.9% in April. The last time this rate was in single-digit territory was November 2020.
However, the bread and cereals price index increased by 20.8% in the 12 months to April, slightly higher than March’s reading of 20.3% but lower than the recent peak of 21.8% recorded in January.
Stats SA said the milk, eggs and cheese product group recorded an annual price increase of 14.5% – the largest rise in 14 years since January 2009.
The average price of a 2-litre carton of fresh full-cream milk increased from R30.14 to R35.88 in the 12 months to April, while the average price of a kilogram of cheddar cheese climbed from R118.24 to R135.11, and a tray of six eggs from R20.38 to R21.59 over the same period.
Stats SA also said vegetables were 23.1% more expensive in April compared with the same month last year, the highest annual rate since November 2007 – more than 15 years ago.
Stats SA said the products pushing up the rate included onions, which went up by 52.8%, carrots at 29,8% higher, peppers rising by 25.0%, and a 24.4% increase in potatoes.
The annual inflation for non-alcoholic beverages was 10.4% in April, the highest rate since January 2010, driven by ground coffee or beans, instant coffee, dairy blends and fruit juices.
On a monthly basis, consumer prices were up by 0.4% in April, slowing from a 1% rise in March and slightly below market estimates of a 0.5% increase.
Meanwhile, the annual core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, rose to an over six-year high of 5.3% in April, up from 5.2% in the prior month, in line with market forecasts.