There’s been another inflation shocker, contrary to forecasts, annual consumer price inflation is still heading higher – reaching 7.1% in March, up from 7% in February.

Economists expected CPI to cool to below 7% in March.

The higher consumer inflation is largely the result of pricier food. Prices of food and non-alcoholic beverages rose by 14.0% over the past year, the biggest increase in 14 years.

It’s still unclear whether the hotter-than-expected inflation rate in March will convince the monetary policy committee (MPC) to hike interest rates even higher at its next meeting at the end of May.

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Food inflation continues its upward trend

In March, milk, eggs & cheese; sugar, sweets & desserts; fruit and vegetables; and the product category ‘other food products’ experienced upward inflationary pressure.

The milk, eggs & cheese product group witnessed its annual rate reaching 13,6% from the recent low of 3,7% in April 2022. The reading in March is the highest annual increase since February 2009’s print of 13,9%.

Bread & cereals, meat, oils & fats, and fish bucked the trend, recording slower growth. The annual increase for bread & cereals was 20,3% in March, down from 20,5% in February.

Meat inflation edged lower to 10,6% from 11,4% in February. Prices of oils & fats decreased for a seventh successive month, dragging the annual rate to 16,0% from 16,7%.

Transport inflation down on lower fuel prices

The transport index rose by 8,9% in the 12 months to March, down from the 9,9% annual rate recorded in February. The downward shift was led by eight consecutive months of slowing fuel inflation, which reached 8,1% in March from 10,9% in February. This is much lower than the 56,2% peak in July 2022.

However, fuel prices rose by 4,5% between February and March. This was mainly due to the price of inland 95-octane petrol rising by R1,27 per litre.

The latest data on education fees

Education fees are surveyed once a year in March. Overall, fees increased by 5,7% in 2023, higher than the 4,4% rise recorded in 2022. Fee increases were recorded for primary and pre-primary schools (up 6,3%), secondary schools (up 5,8%) and tertiary institutions (up 5,3%).

Other education-related products and services that recorded price increases include crèches (up 4,6%), university boarding fees (up 6,7%), textbooks (up 11,3%) and school bags (up 10,6%). The 11,3% rise in textbooks is the largest annual increase since October 2009 (12,0%).

Other notable price changes in March

New excise taxes for alcohol and tobacco products came into effect in March, contributing to a monthly increase of 2,2%. However, the annual rate dropped slightly to 6,2% from 6,3% in February.

Data for the first quarter survey of housing rentals is also included in the CPI for March. Annual inflation for actual rentals was unchanged from December at 2,5%, while owner-occupied housing was 2,7% compared with December’s reading of 2,8%.

In March, inflation for household contents and services rose to 6,9% from 6,2% in February. This is the highest annual increase since June 2009 (7,0%). Prices for appliances, tableware and equipment rose by 7,7%.

Domestic worker wages increased by 1,2% in March from December, leading to a 5,2% annual rise – the highest since February 2019 when the same rate was recorded.

Prices for personal care items increased by 11,1% in the 12 months to March. This is the highest annual rate since the 12,0% in October 2009.