Annual consumer price inflation highest in 13 years

Annual average consumer price inflation increased to 6.9% for 2022, the highest in 13 years, while consumer price inflation slightly dipped to 7.2% in December 2022 from 7.4% in November 2022.

The previous highest inflation rate was 7.9% in 2009 during the financial crisis that hit the global economy. The inflation rate for 2021 was 4.5%.

This is bad news for people who have debt, because 5.9% is significantly higher than the target band of 3% – 6% to contain inflation that the Reserve Bank (Sarb) uses to determine the repo rate. This means that interest rates will increase further and indebted consumers will pay more for their debt.

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According to Statistics SA, food and non-alcoholic beverages increased by 12.4% year-on-year and contributed 2.1 percentage points, while housing and utilities increased by 4.1% and contributed 1 percentage point, transport increased by 13.9% and contributed 2 percentage points and miscellaneous goods and services increased by 4.9% and contributed 0.7 of a percentage point.

In December, the annual inflation rate for goods was 10.1%, down from 10.4% in November and 4.3%, down from 4.5% in November for services.

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The average annual consumer price inflation was 6.9% in 2022 (i.e. the average CPI for all urban areas for 2022 compared with that for 2021).

This was 2.4 percentage points higher than the corresponding average of 4.5% in 2021.