South Africa Inflation Rate Dips to 7-Month Low of 4.5%

The annual inflation rate in South Africa fell to 4.5 percent in December of 2018, reaching the mid-point of the central bank’s target range of 3 percent to 6 percent, from 5.2 percent in the previous month. It is the lowest annual inflation since May as cost of transport slowed sharply.

Year-on-year, inflation was lower mostly for transport (6.0 percent vs 10.7 percent in November), amid a sharp slowdown in cost of fuels (8.7 percent vs 23.1 percent), after a stronger rand and lower international crude oil prices contributed to fall in gasoline cost.  Also, prices eased for food & non-alcoholic beverages (3.0 percent vs 3.4 percent), namely fish (5.7 percent vs 6.0 percent); meat (1.8 percent vs 2.8 percent) and fruit (-1.5 percent vs -3.7 percent); household contents and services (3.2 percent vs 3.4 percent); clothing & footwear (1.7 percent vs 1.8 percent) and restaurants & hotels (3.7 percent vs 4.1 percent). At the same time, inflation was steady for education (6.7 percent) and communication (1.4 percent). 

Meanwhile, prices rose faster for: housing & utilities (5.4 percent vs 5.2 percent), including rents (4.2 percent), water (11 percent) and electricity (7.7 percent); miscellaneous goods & services (5.6 percent vs 5.5 percent); alcoholic beverages & tobacco (4.9 percent vs 4.8 percent); recreation & culture (1.1 percent vs 0.9 percent) and health (5.2 percent vs 5.1 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, fuel and energy, stood at 4.4 percent, unchanged from November and slightly below market consensus of 4.5 percent. It remains at the highest level since May. Compared to the previous month, core consumer prices went up 0.3 percent, after increasing 0.2 percent in November and below estimates of 0.4 percent.

On a monthly basis, consumer prices fell 0.2 percent, following a 0.2 percent gain in November, in line with market expectations. Prices declined mainly for transport (-2.8 percent vs 0.6 percent), pushed down by cost of fuels (-8.0 percent vs 1.1 percent) while inflation was steady for food & non-alcoholic beverages (vs 0.4 percent in November). In contrast, cost went up for housing & utilities (0.5 percent, after being flat in November).

South Africa Inflation Rate Dips to 7-Month Low of 4.5%

Statistics South Africa | Luisa Carvalho |
1/23/2019 1:45:13 PM