Inflation remains at 5.9% in April, with food and transport costs causing concern

Inflation remained at 5.9% in April, the same as in March, but 0,6% higher compared to April in 2021, with the annual inflation rate for goods at 8,5%, down from 8,7% in March and 3,5% for services, up from 3,4% in March.

According to Statistics SA, this was the third time that the inflation rate came so close to the upper target for inflation of 6% required by the Reserve Bank. The last time the inflation rate breached 6% was in 2017.

The Monetary Policy Committee (MPC) of the Reserve Bank meets tomorrow to decide on an interest rate hike to keep inflation down.

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High fuel and food prices

Transport was unsurprisingly one of the main contributors to the annual inflation rate, increasing by 14,7% compared to April 2021 and contributing 2,0 percentage points of the inflation rate. Between March and April, fuel prices increased by 2.2%, but by 29% year-on-year.

Food and non-alcoholic beverages were also one of the main contributors and increased by 6,0% compared to April 2021 and contributed 1,0 percentage point to the total CPI annual inflation rate. In March, the increase was 6.2%.

The fallout of the war in Ukraine can now clearly be seen in the price of food, especially regarding sunflower oil and wheat. The average price of sunflower oil increased from R31.24 in March to R34.89 in April.

The biggest increases in meat prices were for stewing beef that cost 2.8% more in April than in March, mince that cost 2.2% more, and individually frozen chicken pieces that cost 1.4% more.

Housing and utilities were also a main contributor and increased by 4,8% compared to April last year and contributed 1,2 percentage points to the inflation rate.

Miscellaneous goods and services increased by 3,8% year-on-year and contributed 0,6 of a percentage point to the inflation rate.

ALSO READ: Ukraine crisis means food prices will see more spikes, not only in SA, but across Africa

Biggest increases

Goods and services recording the largest increases in April compared to March were:

• Oils and fats that increased by 5,4%
• Fuel increased by 2,2%
• Private transport and other running costs by 2.1%
• Books, newspapers and stationery by 1,5%
• Buying a new vehicle by 1,3%
• Tobacco by 1,3%
• Hot beverages by 1,3%
• Insurance by 1,1%
• Alcoholic beverages (spirits) by 1,1%
• Meat by 1,0%
• Sugar, sweets and desserts by 0,9%.