The latest Stats SA data revealed that the Free State has the highest inflation while Gauteng residents enjoyed the lowest inflation.
South Africa’s headline consumer inflation (CPI) increased to 7% in February from 6.9% in January, slightly higher than the consensus from economists.
It marks the first increase in inflation since October 2022 but remains below the recent peak of 7.8% in July 2022. Month-on-month inflation increased by 0.7%, compared to the 0.1% decline in January.
The upward pressure continued to come from food and non-alcoholic beverages, housing and utilities, transport, and miscellaneous goods and services.
Luigi Marinus, portfolio manager at PPS Investments, said consumers remain under pressure in an increasing interest rate environment and consistently high increases in food prices.
“In addition, the effect of the approved electricity price increase is yet to be included in the inflation print and will add to inflation when it comes into effect,” he said.
The global banking landscape has come under pressure recently with the difficulties experienced by Silicon Valley Bank and Credit Suisse.
It may have tempered the US Federal Reserve’s monetary policy approach, but there is unlikely to be a short-term reprieve in the South African Reserve Bank’s approach.
“With inflation remaining stubbornly above the top end of the target band, the likelihood of another rate hike in the next Monetary Policy Committee meeting remains high,” Marinus said.
Inflation by province
Stats SA provides a more granular look at inflation by breaking down the inflation rate in every province.
There is a 1.8% gap between the province with the lowest inflation rate, Gauteng, and the province with the highest inflation rate, the Free State.
The inflation rate in Gauteng forms the greatest proportion of the national inflation rate. At 36% of the weight of the national inflation rate, it is more than double any other province.
Despite having the country’s lowest inflation rate, Gauteng’s 6.7% is still above the targeted 3% to 6% inflation band the South African Reserve Bank aims for.
Stats SA did not provide an explanation of why there are such significant differences in price increases between provinces.
Here is a breakdown of the rate of inflation by province:
|Province||Inflation rate (%)|