Cape Town - Annual inflation eased further in November, falling to 3.6% from October’s 3.7%.
This is the third successive month of disinflation, which means the pace of price increases is slowing down.
Statistician-General Risenga Maluleke said in a report released on Wednesday, “November’s reading is the lowest since December 2010, when the rate was 3.5%”.
“In layman’s terms this means, if you are a wine drinker, you would have paid 8.7% more for a bottle in November than you would have in the same month last year. Beer prices have risen by 2.8% over the same period.
“Housing and utilities; miscellaneous goods and services; and food and non-alcoholic beverages were the biggest contributors to the 3.6% increase in November,” said Maluleke.
Absa economist Peter Worthington said, “inflation looks very low right now”. “It’s the lowest we’ve had in 15 years.” However, he predicted that inflation would rise in the first quarter of next year.
“Things are going to get just a little bit more expensive for everyone in the next quarter. But what is more important right now is although the inflation is subdued, what we’re getting alongside it is a very sharp deceleration in income,” said Worthington.
Worthington said, “if we were getting great gains in nominal income with really slow inflation, it would be a great real-term increase for consumers, but unfortunately income growth is slowing as well”.
Worthington said, “electricity prices look like they could be set for a sharp increase, though right now we can’t say for sure what the trajectory looks like”. “It will probably materialise over Christmas. Accelerated fuel-price deflation and lower food and non-alcoholic beverages (NAB) and core CPI inflation lay behind the drop in headline inflation in November.”
Maluleke said, “food and non-alcoholic beverages inflation was 3.5%, slightly lower than the 3.6% recorded in October”.
“Bread and cereal prices continue to climb however, recording an annual rate of 8%.
“Fish prices increased by 7.6% and meat was on average 1.8% more expensive than a year ago.”
Maluleke said, “the transport category moved into deflationary territory in November, showing an average annual price decrease of 0.3%”.
“Annual deflation means that overall prices were lower in November than in the same month last year,” he pointed out.
For motorists, a drop in the price of inland 95-octane petrol by 13c per litre between October and November contributed to the decrease.