Slight increase in inflation

After four consecutive months of decreases, inflation increased slightly in August to 4.8% from 4.7% in July.

Fuel price increases and municipal tariffs cancelled gains of lower prices for food and non-alcoholic beverages, leading to a slight movement upwards.

According to Statistics SA, the monthly change in the consumer price index (CPI) was 0.3%, down from 0.9% in July.

Annual inflation for food and non-alcoholic beverages declined for the fifth consecutive month from 9.9% in July to 8.0% in August. All food and non-alcoholic beverages recorded lower annual rates in August. Fruit was the only exception.

The bread and cereals category registered an annual rate of 9.9%, lower than July’s reading of 13.1%. Many products were cheaper in August compared to July, including white bread, brown bread, maize meal and cereals. However, rice put a damper on the good news with prices jumping 3.4% compared to July.

General meat inflation was also softer, with the annual rate decreasing to 3.6% from 5.1% in July. The prices for most beef and chicken products decreased between July and August, with the exception of chicken giblets and beef extract. The price index for meat was 0.7% lower in August, compared to July.

According to Statistics SA, the milk, eggs and cheese category followed the same script as the annual rate eased from 14.4% in July to 11.9% in August. A number of products registered lower prices in August compared to July, including fresh full-cream milk, eggs and cheddar cheese. Only the prices of favourite treats, such as condensed milk and custard, increased.

Talking of treats, sugar, sweets and desserts registered the highest annual inflation rate of 18.5% of all food and non-alcoholic beverage categories, though it was slightly less than July’s 18.7%.  Jam and chocolate slabs were cheaper in August compared to July, while prices for brown sugar, white sugar and ice cream continued to increase.

Annual inflation for alcoholic beverages also slowed to 6.9% from 7.8% in July, with beer prices decreasing 0.8% in August compared to July and wine decreasing 0.3%.

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Price increases driving inflation higher

Statistics SA also surveyed municipal rates in July and August. Electricity tariffs increased 15.3% in 2023, much higher than the 7.9% rise recorded in 2022.

In addition, households paid 9.6% more for water in 2023 after bearing the brunt of an 8.1% increase the year before. Property rates also increased 8.4% after a 4.3% increase in 2022.

Western Cape residents experienced the biggest increases in electricity tariffs (17.0%) and property rates (11.0%), while residents in KwaZulu-Natal recorded the largest rise in water charges (14.2%), followed by Gauteng (10.0%).

Other notable price changes in August included:

• Fuel prices increased 2.2% between July and August.
• Restaurants and hotels recorded the second highest annual inflation rate after food and non-alcoholic beverages. Restaurant inflation increased to 6.7% from 6.5% in July, while prices for hotel rooms increased 5.9% in the 12 months to August, higher than the annual rate of 2.3% recorded in July.
• Prices for red meat-based products increased 2.9% between July and August, resulting in an annual change of 9.8%. Hamburger prices increased 1.2% between July and August, taking the annual rate to 6.6%.

Products that became more expensive over the past year included onions (50.6%), potatoes (29%), cauliflower (26.1%), broccoli (25.8%), carrots (24.6%), brown sugar (23.8%), books (21.3%), white sugar (20.7%), rice (19.8%) and vinegar (19.4%).

Products that became more expensive from July to August, included cucumbers (8%), peppers (7.9%), lettuce (5.9%), carrots (3.5%), pumpkin (3.5%), rice (3.4%), baby food cereal (3.3%), diesel (3.3%), drinking chocolate (3.2%) and broccoli (3%).