South African consumer inflation surged to a 13-year high in June mainly driven by rising transport and food prices.
Statistics South Africa (Stats SA) today said the annual inflation rate in South Africa quickened to 7.4 percent in June from 6.5 percent in May, and above market expectations of 7.2 percent.
This is the highest rate since May 2009 when the rate was 8.0 percent when the economy was facing the headwind of currency depreciation during the global financial crisis.
The annual inflation rate has already broken through the upper limit of the South African Reserve Bank’s target range of 3-6 percent, making it a hot topic for debate particularly in the area of monetary policy.
On a monthly basis, the Consumer Price Index (CPI) increased by 1.1 percent between May and June.
Stats SA said the main groups contributing to high food inflation in June were bread and cereals, meat, and oils and fats.
Stats SA chief director for price statistics Patrick Kelly said prices of food and non-alcoholic beverages (NAB) increased by 8.6 percent year-on-year in June.
Kelly said this was the highest annual rate for food and NAB since March 2017 when the country was recovering from severe drought.
“Bread and cereal products recorded an annual rate of 11.2 percent in June, up from 8.4 percent in May. The monthly increase was 2.6 percent with notable price rises for maize meal, brown bread and macaroni,” Kelly said.
“Meat prices increased by 9.5 percent in the 12 months to June, slightly higher than 9.4 percent recorded in May. Large price increases are widespread across the group, with polony recording the highest annual increase of 19.0 percent.
“The index for oils and fats registered an annual increase of 32.5 percent compared with 26.9 percent in May. This product group has seen sustained levels of high inflation, with annual increases above 20 percent since May 2021.”
Transport goods and services recorded an average annual price increase of 20.0 percent and a monthly rise of 4.2 percent.
Stats SA said fuel prices were up by 45.3 percent in June, representing the largest annual increase for fuel since the current CPI series began in 2009.