Consumer prices in South Africa have plummeted to the lowest level in 4-and-a-half years, dipping below 4% year-on-year as transport inflation continues to ease.
According to data from Statistics South Africa (StatsSA), the annual inflation rate fell for a fourth consecutive month to 3.8% in September, down from 4.4% in August.
This is the lowest inflation print since March 2021, when the rate was 3.2%.
On a monthly basis, prices increased by 0.1% between August and September.
Core inflation, which excludes food, non-alcoholic beverages, fuel and energy prices, remained unchanged at 4.1% .
StatsSA’s chief director for price statistics Patrick Kelly said softer transport inflation – specifically lower fuel prices – was the main drag on the headline rate.
“The transport category entered deflationary territory for the first time in 13 months, with the annual rate falling from 2.8% in August to -1,1% in September,” Kelly said.
“Fuel prices dropped for a fourth successive month and are on average 9.0% lower than a year ago. A litre of inland 95-octane petrol was R22.19 in September, the lowest price since February 2023 (R21.68). Price increases for vehicles have also slowed; the annual rate was 3.6% in September 2024, down from a high of 8.4% in September 2023.”
However, the annual food and non-alcoholic beverages (NAB) inflation remained unchanged at 4.7% from August.
This was despite softer annual rates recorded for hot beverages; meat; bread and cereals; sugar, sweets and desserts; and oils and fats.
StatsSA said hot beverages continued to register the highest annual rate among all food and NAB categories (at 15.8%), despite a cooler rate in September when compared with August’s 17.5%.
Vegetables, fruit, cold beverages and fish recorded higher rates in September. Inflation for milk, eggs & cheese was stable.
On a month-on-month basis, the food and NAB price index increased by 0.6% in September compared with August. This is the highest monthly rise since January this year, when the rate was also 0,6%.
The alcoholic beverages and tobacco category registered an annual rate of 4.7%, up from 4.3% in August. Beer prices increased by 5.2%, spirits by 4.3% and wine by 4.0% in the 12 months to September.
Investec chief economist Annabel Bishop said though there were risks ahead in spite of very moderate inflationary pressures, given rand strength, a large fuel price drop and high statistical base effects.
“The risks are to the upside for the fourth quarter of 2024 for international fuel and food prices, while CPI inflation experiences downwards pressures from base effects. Overall, the quarter should be moderate,” Bishop said.
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