Home South African Consumer inflation soared to near five-year high in December

Consumer inflation soared to near five-year high in December

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The annual consumer inflation in South Africa accelerated to a near five-year high in December 2021, mainly pushed up by higher fuel and food prices.

File picture: Nadine Hutton/Bloomberg

THE ANNUAL consumer inflation in South Africa accelerated to a near five-year high in December 2021, mainly pushed up by higher fuel and food prices.

Data from Statistics South Africa (StatsSA) on Wednesday showed that the consumer price index (CPI) rose further to 5.9 percent in December, from 5.5 percent in November.

This was the steepest inflation rate since March 2017 and was above market expectations of 5.7 percent.

Inflation is now approaching the top end of the South African Reserve Bank’s monetary policy target range of 3-6 percent, and could strengthen the bank’s case to tighten its monetary policy.

StatsSA chief director of price statistics Patrick Kelly said inflation was mainly driven higher by prices of transport, which rose 16.8 percent from 15 percent in November, food and non-alcoholic beverages.

“Average consumer inflation for 2021 was 4.5 percent, that is higher than the averages recorded for 2020, which was 3.3 percent, and 2019 at 4.1 percent.”

“December inflation reading reflects similar trends to those driving rises in the cost of living over the past few months, in particular large price rises for fuel and imported food groups such as meats, oils and fats.

“Fuel prices jumped by 40.5 percent in the 12 months to December 2021, with the price of inland 95 octane petrol rising to R20.29 per litre, the first time that the price has broken the R20 per litre mark.

“The annual rate recorded for meat in December was 8.6 percent, slightly up from November’s reading of 8.5 percent. However, the 1.2 percent monthly increase in meat prices between November and December was far higher than the 0.4 percent rise recorded between October and November.”

On a monthly basis, consumer prices were up by 0.6 percent, after a 0.5 percent increase in the prior month and above market estimates of 0.4 percent rise.

StatsSA said housing and utilities rose to 4.2 in December from 3.9 percent the previous month.

The annual core inflation rate, which excludes volatile items such as food and non-alcoholic beverages, fuel and energy, was at 3.4 percent in December, the highest since October of 2020, up from 3.3 percent in the prior month and market estimates of 3.3 percent.

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