Consumer prices in South Africa dramatically retreated to their lowest in 20 months in June, dragged lower by fuel and food prices during the month.
Statistics South Africa (Stats SA) today said the annual headline inflation cooled to 5.4% in June from 6.3% year-on-year in May, sinking below the upper limit of the South African Reserve Bank’s (SARB) monetary policy target range.
The rate in June is the lowest reading since October 2021, when the rate was 5.0%, and the last time inflation was below 6% was in April 2022.
On a monthly basis, however, inflation increased by 0.2% in June.
Stats SA chief director for price statistics Patrick Kelly said the 0.9 of a percentage point drop in headline inflation between May and June was the largest decline since May 2020, when the rate also declined by 0.9 of a percentage point.
Kelly said of the 12 main categories covered by the consumer price index (CPI), six saw a drop in annual inflation in June 2023, one remained unchanged and five recorded increases.
Kelly said inflation on transport declined significantly after the Department of Mineral Resources and Energy (DMRE) decreased the price of petrol by 71 cents per litre and diesel by between 80 cents and 84 cents in June.
“Annual transport inflation tumbled from 7.0% in May to 1.8% in June, dragged lower mainly by softer fuel prices. The fuel index declined by 8,3% in June 2023 compared with June 2022,” Kelly said.
He said the annual goods inflation dropped to 6.3% in June from 8.0% in May, while the services inflation was slightly lower at 4.5% in June compared with 4.6% in May.
“Annual inflation for food and non-alcoholic beverages (NAB) slowed for the third successive month, cooling to 11.0% from a high of 14.0% in March, Kelly said.
“Most food and NAB components recorded lower inflation rates in June, with the exception of vegetables, fruit, sugar, sweets and desserts. Annual inflation for sugar, sweets and desserts accelerated from 11.9% to 16.4%. This is the highest reading for this category since June 2017.
“Prices for oils and fats decreased for the tenth successive month, with the index declining by 9.5% in the 12 months to June. The average price of a 750 ml bottle of sunflower oil was R35,57 in June 2023, lower than the R43,97 price tag in June 2022.”
However, the annual inflation rate for alcoholic beverages and tobacco bucked the trend and increased to 6.1% from 5.9% in May.
Wine inflation quickened to 9.4% from May’s reading of 9.1% and beer inflation accelerated too, rising to 5.5% from 4.7%.
The CPI in June incorporates the most recent quarterly survey of housing rents.
Kelly said actual rents recorded an annual increase of 2.7%, slightly higher than March’s print of 2.5%.
The annual rate for imputed rents was 2.9%, up from 2.7% in March.
On a quarter-on-quarter basis, imputed rents increased by 1.2% between March 2023 and June 2023, the largest quarterly increase since September 2018 when the rate was also 1.2%.