Inflation at 13-month low in May

Inflation decreased to a 13-month low in May to 6.3% from 6,8% in April thanks to the prices of food and non-alcoholic beverages decreasing to 11.8% from 13.9% in April, when it was the highest in 14 years.

Economists in a Bloomberg survey predicted an inflation rate of 6.5% for May.

According to the inflation rate for May, announced by Statistics SA today, the main contributors to the inflation rate were: 

• Food and non-alcoholic beverages that increased by 11.8% year-on-year and contributed 2.1 percentage points.
• Housing and utilities that increased by 4% year-on-year and contributed 1 percentage point.
• Transport that increased by 7% year-on-year and contributed 1 percentage point.
• Miscellaneous goods and services that increased by 6.3% year-on-year and contributed 0.9 percentage points.

In May, the annual inflation rate of goods was 8%, down from 9% in April and 4.7% for services, unchanged from 4.7% in April.

Statistics SA said the inflation rate for May was the lowest it has been since April 2022, while food inflation saw the smallest increase since November 2021, increasing by only 0.3% from April to May.

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Food inflation

Although meat prices decreased by 0.4% from April to May, meat still cost 7.1% more than in May last year.

The prices of bread and cereals decreased from 20.8% in April to 18.1% in May, while oils and fats now cost 2.4% less than a year ago.

However, the prices of sugar, sweets and desserts increased by 11.9% from 10.7% in April in line with the price of sugar that increased by 2.7% and chocolate by 2.9%.

Fizzy drinks, mineral water and fruit juices also became more expensive with the cold beverages category recording an average annual price increase of 10.5% in May, after reaching 10,3% in April. May’s reading is the highest since March 2019, when it was 13,1%.

As rolling blackouts ate into cooking time, consumers increased their spending in the first quarter at restaurants and hotels, which jumped by 6,9%.

Statistics SA said price data for May shows annual inflation for the restaurants and hotels category accelerating to 6.4% from 5.1% in April.

Restaurant prices increased by 1,2% between April and May, taking the annual rate for restaurants to 7.4% from 7.1% in April.

Restaurant products with the highest annual increases in May were fish and seafood (up 11.3%), pizza (up 9,3%) and red meat-based products (up 9%).

Products with large month-on-month increases in May were pies (up 2.3%), hot beverages (up 1.9%), poultry-based products (up 1.8%), hamburgers (up 1.6%) and red meat-based products (up 1.5%).

ALSO READ: Inflation increase surprises economists

Transport inflation down

The transport index’s increase of 7% in the 12 months to May was lower than in April when it was 7.6%.

Annual motor vehicle inflation increased to 7.5% from 7.2% in April, the highest since February 2017 when the rate was 8,1%.

The annual rate for fuel decreased further in May, cooling to 3.5% from 5% in April.

Statistics SA said annual health inflation also increased since January when the rate was 4,8%, to 5,8% in May, mainly due to higher prices for medical products, which recorded an annual rate of 5,8%, up from 4,8% in April.

Notable monthly price increases were recorded for pain killers (up 3%) and vitamins and mineral supplements (up 6.6%).