South Africa’s inflation cooled in August, with the annual consumer price inflation rate dropping to 3.3% from 3.5% in July, according to Statistics South Africa.
On a monthly basis, the inflation rate also fell, with the Consumer Price Index (CPI) decreasing by 0.1% between July and August.
Four of the thirteen CPI basket categories showed monthly price drops: food & non-alcoholic beverages, furnishings, household equipment & routine maintenance, transport, and information & communication.
Food and Fuel Inflation Eases
Food inflation softened, with the annual rate for food & non-alcoholic beverages dropping to 5.2% from 5.7% in July. Several food categories saw lower year-on-year increases: cereal products; fish & other seafood; dairy & eggs; fruits & nuts; and vegetables.
The cereal products category fell from 2.1% in July to 1.5% in August. Some staples are cheaper now than a year ago; hot cereals are down 7.8%, and white rice is down 7.2%.
Bread and pasta saw almost flat or modest increases: white bread held steady (0.0%), brown bread +0.4%, macaroni +0.5%, spaghetti +0.6%.
Staples like samp (+14.8%) and maize meal (+8.2%) remain significantly more expensive.
Meat inflation remains a concern, especially for beef. Year-on-year, beef mince rose 27.2%, stewing beef 32.3%, and beef steak 28.6%. However, monthly increases are slower, and beef steak even saw a 1.2% drop between July and August.
Milk, dairy & eggs saw negative inflation: the category’s annual rate was −1.1%, lowest since March 2011, with fresh full-cream milk down 2.9% year-on-year.
Fuel costs also continued easing: annual fuel inflation was −5.7% (down from −5.5%), with inland 95-octane petrol prices falling by 28c per litre (monthly decline ~1.3%), while diesel rose by 2.5% month-on-month.
Other Goods & Services
Certain non-food and non-beverage items exhibited sharp annual price increases:
- Books: +30.8%
- Movie tickets: +15.9%
- Video games: +14.7%
While food and fuel were major drivers of the slowdown, these sharp rises in discretionary goods show that inflation pressures are still present in some pockets.
What It Means
The drop in headline inflation and the month-to-month decline suggest easing inflationary pressures. Softer food and fuel inflation are helping, though some basic goods remain costly. Trends like declining dairy prices and cheaper staples could provide relief for many households.
As the South African Reserve Bank monitors inflation closely for its monetary policy decisions, this new data may give it more leeway. The MPC will make its latest decision on the repo rate tomorrow, 18 September. Economists are split on whether rates will be cut or held.
