Inflation jumps as food and fuel prices bite

South Africa’s annual consumer price inflation (CPI) rose significantly in September but remains within the South African Reserve Bank’s (SARB) target range.

StatsSA announced today that annual CPI was 5.4% in September 2023, up from the 4.8% recorded in August 2023.

In June, the inflation rate fell within the SARB’s target range for the first time since April 2022.

July’s rate was also within the SARB’s target range of 3% to 6% and far closer to its target midpoint of 4.5%.

According to StatsSA, the consumer price index increased by 0.6% in September 2023.

The main contributors to the 5.4% annual inflation rate were:

  • Food and non-alcoholic beverages increased by 8.1% year-on-year and contributed 1.4 percentage points;
  • Housing and utilities increased by 5.5% year-on-year and contributed 1.3 percentage points;
  • Miscellaneous goods and services increased by 6.0% year-on-year and contributed 0.9 of a percentage point.
  • Transport increased by 4.2% year-on-year and contributed 0.6 of a percentage point.

In September, the annual inflation rate of goods was 6.8%, up from 5.6% in August. For services, it was 4.0%, unchanged from August.

This data will inform the Monetary Policy Committee’s (MPC) interest rate decision at its meeting next month.

At its last MPC meeting in September, the SARB elected to keep the interest rate hiking cycle that has been ongoing since November 2021 on pause.

However, the MPC warned that this was merely a pause in the hiking cycle rather than the end, and it would remain dependent on data for future decisions.

“At the current repurchase rate level, policy is restrictive, consistent with elevated inflation expectations and the inflation outlook,” said SARB Governor Lesetja Kganyago.

“Serious upside risks to the inflation outlook remain. In light of these risks, the committee remains vigilant, and decisions will continue to be data-dependent and sensitive to the balance of risks to the outlook.”


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