Lerato Mbhiza
Annual consumer inflation slumped to 4,7% in July from 5,4% in June. This is the lowest reading since July 2021, when the rate was 4,6% , according to Statistics South Africa.
Consumer prices increased on average by 0,9% between June 2023 and July 2023, up slightly from the monthly increase of 0,2% recorded in both May and June .
Transport costs put the brakes on overall inflation, previously a major upward driver of inflation. The transport category helped pull overall inflation down in July, said Patrick Kelly from Statistics SA.
“In 2021 and 2022, overall inflation was mainly pushed higher by transport, and consumer inflation hit a 13-year high of 7,8% in July 2022, with transport contributing 44% (3,4 percentage points) to the headline rate,” said Kelly .
The annual rate for fuel was -16.8. As a practical illustration, if you have a car with a 50-litre tank, you’re spending R214 less on each fill up compared to a year ago.
The decline in fuel prices weakened the upward push of transport on consumer inflation. This dragged the transport category down into negative territory for the first time since January 2021.
This also occurred in 2020 when annual transport inflation was negative from April to June and again from October to December.
After peaking in July 2022, fuel prices began to ease. Inland 95-octane petrol receded to R22,46 per litre in July 2023. For a vehicle with a 50-litre fuel capacity, this translates to a saving of R214.
Food inflation has also eased but average households are paying 14.5% more for electricity and 9.6% more for water.
“Food inflation has also decreased but not as quickly as transport. The annual rate for the food and non-alcoholic beverages (NAB) category was 9,9% in July, lower than June’s print of 11,0%.
“Annual inflation for bread and cereals slowed to 13,1% from 15,5% in June. Maize meal, an important staple, was cheaper in July compared with June, with prices falling on average by 0,7%” he added .
“Inflation for alcoholic beverages is also picking up. The annual rate for the category increased to 7,8% in July from 6,9% in June. Annual wine inflation edged higher to 9,8% and beer saw its rate bubble up to 7,4%.
Stats SA said “surveys of municipal tariffs every year in July and August showed that the housing and utilities index increased by 2,8% between June and July. On average, households are paying 14,5% more for electricity. Water tariffs increased by 9,6% and property rates by 2,9%”.
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