July CPI declines to 4.6%

The Consumer Price Inflation (CPI) rate for July has declined to 4.6% year-on-year from 4.9%  in June.

However, Statistics SA says on a month-on-month basis, CPI rose by 1.1% in July compared with 0.2% in June.

The South African Reserve Bank has an inflation target range of between 3 and 6%.

Food and non-alcoholic beverages were the largest contributors to the annual rate, with price increases remaining steady at 6.7%, unchanged from June and May.

The monthly rate was 0,2%, the same as the previous monthly increase.

Meat, oils and fats continue to exert upward pressure, with meat prices rising by 9,4% over the past twelve months.

This rate has climbed steadily since August 2020 and is currently at its highest level since March 2018. Inflation for oils & fats also continues to escalate, reaching an annual rate of 22.4%, the highest in almost 10 years, since October 2011.

Sugar, sweets and desserts inflation has slowed, from a 12-month high of 9.7% in October 2020 to 6.5% in July 2021.

Prices for alcoholic beverages recorded a monthly rise of 1.7% in July, the highest increase since March 2019. Red and white wine prices increased sharply, both recording a 3.8% rise in July from June.

Municipal charges

Municipalities typically increase service charges in July and August with the beginning of the municipal financial year. Although water charges increased by less than last year, hikes for electricity and assessment rates were higher than in 2020. Water charges increased by 7.0% as compared with 9.9% in 2020, electricity tariffs by 13.8% as compared with 6.3% in 2020, and assessment rates by 4.3% as compared with 3.5% in 2020.

Fuel prices increased by 1.7% between June and July. This took the annual rate to 15.2%, down from June’s reading of 27.5%.

The inclusion of new price changes for medical insurance or medical aid took the annual rate for this category from 4.6% in June to 5.9% in July.

Below is the July 2021 Consumer Price Index Document from StatsSA: