Inflation rose for the second consecutive month in September. This time even closer to the Reserve Bank’s target band. There is now concern about what the inflation rate will do before the end of the year.
Statistics South Africa’s (StatsSA) latest figures show that consumer price inflation rose from 4.8% in August to 5.4% in September. This brings the inflation rate to the same level as June this year.
The fuel index also rose in September (also for a second consecutive month).
A price increase of 7.6% was noticed at the fuel pump last month with the price of domestic 95-octane petrol rising by R1.71 per liter and reaching a 13-month high of R24.54.
StatsSA says the transport category (which is mainly influenced by fuel) exerted strong upward pressure on the monthly inflation rate. The category consequently contributed 0.4 of a percentage point to the monthly rise of 0.6% in the consumer price index.
“After three consecutive months in negative territory, annual fuel inflation jumped from -11.7% in August to 1.5% in September,” according to StatsSA.
The latest inflation rate is further attributed to the increase in the price of food and non-alcoholic drinks which rose by 12% on an annual basis.
Meat, fish, oils and fats, fruit and non-alcoholic beverages were all more expensive in September this year compared to September last year. Bread and cereals, sugar, sweets and desserts, vegetables and milk, eggs and cheese were slightly cheaper.
StatsSA says meat prices rose by an average of 0.6% between August and September, pushing the annual rate up to 3.8%.
The price of poultry-related products was also pushed up last month due to the outbreak of bird flu. The outbreak is considered the worst to hit the country.
Fresh whole chickens and fresh chicken portions were consequently 2.2% more expensive.
The price of eggs showed a monthly increase of 0.3% after a decrease of 0.4% in August.
StatsSA says the price of poultry-related products should be closely monitored in the coming months to determine the effects of the outbreak.
The price of bread and cereals decreased for a fifth consecutive month – from 9.9% in August to 9.2% in September. Lower annual rates were recorded for most products in this group. For example, the inflation rate of rice fell from 19.8% in August to 18.6% in September.
However, higher rates were recorded for instant noodles (17.7%) and cakes and tarts (8.4%).
The price index for hot drinks jumped by 3.5% between August and September. Instant coffee (+4.8%), ground coffee (+4.6%) and rooibos tea (+3.7%) were all more expensive than the previous months.