There’s some reprieve for consumers who are buckling under the pressure of high prices as inflation slows down.
Statistics South Africa’s (Stats SA ) new released data shows that the Consumer Price Index (CPI) for December shows a year-on-year decline of 5.1%, down from 5.5% in November.
On a month-on-month basis, the CPI was unchanged in December. This keeps the CPI within the Reserve Bank’s inflation target range of 3% to 6%.
In a statement, Stats SA says the average inflation rate for the year was 6.0%, lower than the 6.9% recorded in 2022.
Inflation was relatively high in the first five months of 2023, with the headline rate consistently above 6.0%.
Inflation fell below this level in the remaining seven months of the year. The highest rate in 2023 was 7.1% in March and the lowest was 4.7% in July.
Product categories ending the year with annual rates higher than 6.0% in December were food & non-alcoholic beverages at 8.5%, restaurants & hotels at 7.0% and health at 6.5%.
Economist Elise Kruger says a decline in fuel inflation supported a slowdown in inflation in December.
“We saw that food prices remained unchanged on a monthly basis; that was a definite positive in the month, but a couple of factors are still relevant. On the one side, the impact of loadshedding that adds to the cost of food production but also the rand exchange rate at currently high levels also impacting on some of our food prices determined in dollar terms. I do forecast that food prices will moderate further from current levels to about 6% by the end of 2024. There were also further declines in fuel prices in December.”
In December last year, the Old Mutual Investment Group said it sees coming down to 4.5% by mid-2024, the mid-point of the Reserve Bank’s inflation target.
The group is also positive about the lower stages of rolling blackouts next year, given the massive capital investment made by the private sector in renewable energy.
VIDEO | Optimism as Old Mutual forecasts CPI to decrease to 4.5% by mid-2024:
