Inflation down sharply in October – lowest since June 2020

Inflation declined sharply in October to 2.8% from 3.8% in September, to reach the lowest point since June 2020 during the Covid-19 pandemic when the inflation rate was 2.2%.

According to Statistics SA, which announced the inflation rate for October on Wednesday morning, falling fuel prices remain the primary factor behind the slowdown.

Petrol and diesel prices decreased by 5.3% between September and October, taking the annual rate for fuel to -19.1%.

The price for inland 95-octane petrol in October was R21.05, the cheapest since February 2022 when the price was R20.14.

The aggregate transport index decreased by an annual 5.3%, pulling overall inflation down by 0.8 of a percentage point.

Food inflation also decreased after remaining steady for six months in the 4.5–4.7% range, with annual inflation for food and non-alcoholic beverages decreasing to 3.6% in October. This is the lowest rate since November 2019, when it was 3.5%).

Statistics SA says inflation cooled for most food and non-alcoholic beverages subcategories in October, except for sugar, sweets and desserts, and cold beverages.

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Food inflation shows staples cheaper, but sweet things cost more in October

The price index for bread and cereals decreased by 0.5% between September and October, dragging the annual rate down to 4,6%, Statistics SA says.

A range of bread and cereal products was cheaper in October than in September.

Most notably, the price of maize meal decreased by 2%, representing a third consecutive month of decline. Consumers also paid less on average for other key products, such as spaghetti, macaroni, rice and samp.

Annual inflation for milk, eggs and cheese also dipped steeply to 4.1% in October from 6.9% in September. According to Statistics SA, the monthly rate was -0.2%, with price decreases recorded for milk products, yoghurt and cheddar cheese.

However, bucking the trend, prices for custard, sour milk, eggs and mageu were higher in October compared to September.

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Consumers with a sweet tooth paid more

Consumers with a sweet tooth paid more for sugar, sweets and desserts, but this category did record an annual rate of 6.9%, which is significantly lower than the recent high of 18.5% recorded in February this year.

The price index for the category rose by 1% between September and October, with chocolates, jam and white sugar recording relatively large increases.

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Hot and cold drinks are more expensive

Although hot beverages continued to register the highest inflation print among all food and non-alcoholic beverage categories at 14.1%, the rate has eased from 17.6% in July.

The monthly rate was 0.8% in October, with notable price increases for instant coffee, drinking chocolate and black tea, but cappuccino sachets were slightly cheaper.

According to Statistics SA, the index for cold beverages rose by 1.1% between September and October, taking the annual rate from 5.7% to 7.0%.

Consumers paid more for fizzy drinks and mineral water, but dairy blends and fruit juice concentrates were cheaper.

This graph shows food and beverage products that recorded the most significant price changes in October: