Consumers are set to come under higher price pressures as inflation continues to exceed its highest levels in thirteen years.
Data released by Statistics South Africa shows that the consumer price Index (CPI) increased to 7.4% in June from 6.5% in May this year.
South African consumer #inflation reached a 13-year high in June, registering at 7,4%. This was up from 6,5% in May.
— Stats SA (@StatsSA) July 20, 2022
The main driver of inflation in South Africa has come from higher food and fuel prices.
Consumers are set to face further price pressures after municipal rates also increased this month.
A brief breakdown
- Food and non-alcoholic beverages: increased by 8.6% year-on-year, contributing 1.5 percentage points to the total CPI annual rate of 7.4%.
- Housing and utilities: increased by 5.1% year-on-year, contributing 1.2 percentage points.
- Transport: increased by 20.0% year-on-year, contributing 2.7 percentage points
- Miscellaneous goods and services: increased by 4.0% year-on-year, contributing 0.6 of a percentage point.
Stats SA further says in June, the annual inflation rate for goods was 11%, up from 9.5% in May; and for services it was 3.9% up from 3.6% in May.
Meanwhile, Economist Dr Azar Jammine says the Reserve Bank needs to take drastic action as inflation rises higher than it wants it to be.
Unions are demanding huge wage increases for their members in light of the rising cost of living and as wage negotiations season gather momentum, unstable labour relations have started to emerge.
Jammine says the bank is in a tight spot.
Below is the full interview with Jammine on SAfm’s Sunrise programme:
-Additional reporting by SABC News