Inflation spikes to 5.4% amid soaring fuel and food costs

Consumer price inflation increased to 5.4% in September from 4.8% in August, bringing the rate back to the same level as it was in June, mainly due to higher fuel prices and slightly higher food inflation.

According to Statistics SA the fuel index increased for a second consecutive month, increasing 7.6% between August and September.

ALSO READ: Will chicken and fuel prices affect inflation rate for September?

The price of inland 95-octane petrol saw a major increase in September of R1.71 to reach a 13-month high of R24,54 per litre. Therefore, transport category, mainly influenced by fuel, exerted strong upward pressure on the monthly inflation rate. Transport contributed 0.4 of a percentage point to the 0.6% monthly rise in the consumer price index (CPI).

After three consecutive months in negative territory, annual fuel inflation jumped from -11.7% in August to 1.5% in September.

In addition, after cooling for the past five months, the annual rate for food and non-alcoholic beverages inched higher to 8.1% from 8.0% in August. Meat, fish, oils and fats, fruit and non-alcoholic beverages all registered higher annual rates in September. Lower rates were recorded for bread and cereals, sugar, sweets and desserts, vegetables and milk, eggs and cheese.

Meat prices increased on average 0.6% between August and September, pushing the annual rate up to 3.8%, while poultry-related products experienced some upward price movements in September as producers started to cull birds in response to the outbreak of Avian Flu.

The price of fresh whole chicken and fresh chicken pieces increased 2.2%, while egg prices registered a monthly increase of 0.3% after a decline of 0.4% in August. Statistics SA says the prices of poultry-related products deserve a close watch in the coming months to gauge the impact of the Avian Flu outbreak. The October CPI, due for release on 22 November, will provide the next update.

ALSO READ: Slight increase in inflation

Inflation for bread and cereals eased for a fifth straight month, declining from 9.9% in August to 9.2% in September. Lower annual rates were recorded for most products in this group. Rice, for example, saw its rate slow to 18.6% from 19.8% in August. Higher rates were recorded for maize meal (11.9%), instant noodles (17.7%) and cakes and tarts (8.4%).

The price index for hot beverages jumped 3.5% between August and September. The largest increases were recorded for instant coffee (up 4.8%), ground coffee (up 4.6%) and rooibos tea (up 3.7%).

Other notable price changes included housing rent data for the third quarter that was 2.6%, down from 2.7% in the second quarter. Annual health inflation edged higher to 6.5% in September from 6.2% in August, the highest rate for health since November 2017 when it was also 6.5%. Prices for medical products increased 7.5% in the 12 months to September.

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