Inflation for June surges by 1.1% to become highest in 13 years

Inflation for June surged by 1.1% compared to May to become the highest in 13 years, mainly due to fuel and food prices.

The last time South Africa saw such a high inflation rate was in May 2009 (8.0%) when the economy was facing the headwind of currency depreciation during the global financial crisis.

Annual consumer inflation jumped to 7.4% in June from 6.5% in May, with the annual rate increasing during 2021 and the first half of 2022. Many countries around the globe experienced increasing inflation in recent months, making it a hot topic for debate particularly in the area of monetary policy, Statistics SA said.

Prices of food and non-alcoholic beverages increased by 8.6% year-on-year in June, the highest annual rate for food and non-alcoholic beverages since March 2017 when the country was recovering from severe drought.

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Food prices adding to inflation

The main groups contributing to high food inflation in June 2022 were bread and cereals, meat, and oils and fats, according to Statistics SA. Bread and cereal products increased by 11.2% in June, up from 8.4% in May. The monthly increase was 2.6%, with notable increases for maize meal (5.2%), brown bread (3.2%) and macaroni (3.0%).

Meat prices increased by 9.5% in the 12 months to June, marginally higher than the 9.4% recorded in May, with polony showing the highest annual increase of 19.0%. Oils and fats registered an annual increase of 32.5% compared to 26.9% in May with sustained levels of high inflation and annual increases above 20% since May 2021.

The prices of food and non-alcoholic beverages increased by 8.6% year-on-year and contributed 1.5 percentage points to the total consumer price index (CPI) annual rate of 7.4%.

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Fuel and transport

The annual average price increase for transport goods and services was 20.0%, with a monthly increase of 4.2% after fuel prices increased by 45.3% in June, the largest annual increase for fuel since 2009.

Statistics SA said fuel is not the only component in the transport product group with significant price increases. The price of used vehicle prices increased since May 2020 (recording an annual rate of -2.9%) to reach 11.1% in June 2022.

Public transport prices increased by 14.3% from June 2021 and by 4.3% from May 2022. Taxi fares increased by 2.7%, airfares by 7.1% and long-distance bus fare by 11.7%.

Transport increased by 20.0% year-on-year and contributed 2.7 percentage points.

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Other increases

Housing and utilities increased by 5.1% year-on-year and contributed 1.2 percentage points. Miscellaneous goods and services increased by 4.0% year-on-year and contributed 0.6 of a percentage point.

In June the annual inflation rate for goods was 11.0%, up from 9.5% in May; and for services it was 3.9%, up from 3.6% in May.