South Africa Inflation Rate at Near 1-Year Low of 4%

The annual inflation rate in South Africa declined to 4.0 percent in January of 2019 from 4.5 percent in the previous month and below market expectations of 4.3 percent. It is the lowest inflation rate since March last year mainly due to falling fuel prices.

Year-on-year, inflation slowed mainly for transport (2.9 percent vs 6.0 percent in December), due to lower cost of fuels (-1.2 percent vs 8.7 percent) reflecting the significant drop in international oil prices since September. Also, prices rose less for miscellaneous goods & services (5.3 percent vs 5.6 percent); alcoholic beverages & tobacco (4.7 percent vs 4.9 percent); restaurants & hotels (3.6 percent vs 3.7 percent) and health (4.8 percent vs 5.2 percent). Meantime, inflation was steady for food & non-alcoholic beverages (3.0 percent); housing & utilities (5.4 percent); recreation & culture (1.1 percent) and education (6.7 percent).

On the other hand, cost advanced faster for household contents and services (3.4 percent vs 3.2 percent); clothing & footwear (1.8 percent vs 1.7 percent) and communication (1.5 percent vs 1.4 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, fuel and energy, stood at 4.4 percent in January, unchanged from the two previous months and slightly below market expectations of 4.5 percent. It holds at the highest level since May. Compared to the previous month, core consumer prices went up 0.2 percent, following a 0.3 percent increase in December and below estimates of a 0.3 percent gain.

On a monthly basis, consumer prices dropped 0.2 percent, the same pace as in the preceding month and against market consensus of a 0.1 percent increase. Main downward pressure came from cost of transport (-3.3 percent vs -2.8 percent), namely fuels (-10.2 percent vs -8.0 percent) which posted the biggest monthly drop since January 2015.

South Africa Inflation Rate at Near 1-Year Low of 4%

Statistics South Africa | Luisa Carvalho |
2/20/2019 3:10:23 PM