JOHANNESBURG - South Africa’s headline consumer inflation declined from 4.5% year on year from December to 4% in January, on the account of lower fuel prices reflecting the significant drop in the international oil price since September.
In January, petrol and diesel prices decreased by 123c/litre and 154c/litre respectively, which translated to fuel price deflation of 1.2% y/y compared to the increase of 8.7% y/y in December and the average of 20.0% y/y in H2.19.
Core inflation, reflecting the underlying trend of inflation, remained steady at 4.4% y/y for the third consecutive month. Core inflation averaged 4.3% y/y in 2018, signalling muted domestic inflationary pressures and relatively modest pass through of past rand depreciation.
Investec said in a statement, "Risks to the inflation outlook remain to the upside. These risks include rand depreciation, a rebound in the international oil price and above inflationary increases in electricity tariffs."
On a month-on-month basis, prices fell 0.2 percent in January from a decrease of 0.2 percent in December.
Core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy, was at 4.4 percent year on year in January from 4.4 percent in December.
On a month-on-month basis, core inflation was at 0.2 percent in January from 0.3 percent in December.
- BUSINESS REPORT ONLINE / REUTERS