Consumer Price Inflation has slowed to 5.1% in June 2024, down slightly from the 5.2% in May.

If inflation continues to cool, it may bode well for a decision on lowering interest rates in September.

READ: Rates kept unchanged, again, but hope for September

Annual food inflation the lowest in 45 months

Annual food inflation is now the lowest in almost four years.

After stalling at 4,7% in April and May, the annual rate for food & non-alcoholic beverages (NAB) edged lower to 4,6% in June.

June’s reading is the lowest since September 2020 – 45 months ago at the peak of the COVID-19 lockdowns – when the rate was 3,8%.

In March 2023, food inflation stood at a whopping 14%.

Stats SA’s Patrick Kelly lists a mixed basket of food items which will now be easier on your pocket, while consumers are still feeling the pinch with others:

‘Several food & NAB categories registered lower annual rates in June, including sugar, sweets & desserts; vegetables; fruit; milk, eggs & cheese; and fish. Inflation quickened, however, for hot beverages; bread & cereals; oils & fats; cold beverages; and meat.’

The annual rate for hot beverages steamed to 16,5% in June from 14,2% in May.

The monthly change was 2,2%, driven by sharp price increases for drinking chocolate (up 3,5%), black tea (up 2,7%), instant coffee (up 2,2%) and Rooibos tea (up 1,6%).

The annual rate for bread & cereals saw its first increase in 14 months, rising to 5,2% in June from 3,9% in May. The monthly rate was 1,5%, with notable increases for maize products such as maize meal (up 3,3%) and samp (up 3,0%).

The milk, eggs & cheese category has experienced six months of slower inflation. The rate for June was 7,3%, down from 14,5% in December 2023. Annual egg inflation recorded its seventh consecutive month of decline, cooling to 20,4%.

Other notable price changes

Housing & utilities recorded an annual inflation rate of 5,5% in June, lower than 5,8% in May. Housing rentals are surveyed quarterly. Actual rentals increased by 0,8% in the second quarter of 2024 compared with the first quarter. Imputed rentals edged higher by 0,7% over the same period.

Townhouses recorded the highest quarterly change at 1,5% (actual rentals) and 1,2% (imputed rentals). Domestic worker wages registered a quarterly rise of 1,6%.

Annual transport inflation cooled to 5,5% in June from 6,3% in May. New vehicle inflation slowed to 5,2% from a recent high of 8,4% in September 2023.

Data from Naamsa indicates that there is lower demand for new passenger vehicles, with sales declining by 9,0% year-on-year in June.1 Inflation for used vehicles was 3,0%, down from 3,7% in May.

Fuel prices dropped by 4,6% between May and June, taking the annual rate for fuel to 7,6% from 9,3%.