South Africa’s annual CPI inflation brakes to 4-year low of 3.9% in February

By bne IntelliNews March 18, 2015

South Africa’s annual headline consumer price inflation decelerated to a 4-year low of 3.9% in February from 4.4% the month before, mainly due to lower petrol prices, data from Statistics South Africa showed.

Compared to the previous month, consumer prices rose 0.6% in February, reversing a 0.2% decline in January.

The annual core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy steadied at 5.8% last month. The monthly core inflation accelerated to 1.3% from 0.4%.

The sub-groups that contributed most to the headline annual inflation last month were housing and utilities (1.3pp, down from 1.4pp in January), miscellaneous goods and services (1.2pp, up from 1.1pp in January), and food and non-alcoholic beverages (1.0pp, the same as in January).

On the other hand, the negative contribution of the transport subgroup increased to -1.1pp last month from -0.4pp in January, as prices dropped 6.3% y/y after a 2.5% y/y fall in January. Within that group, petrol prices plunged 26.7% y/y, deepening from a 17.6% y/y fall in January.

According to SARB’s latest forecast from January, headline inflation should average 3.8% in 2015, with a low of 3.5% in Q2, rising to 5.4% in 2016. Core inflation is anticipated to average 5.5% this year, reaching a peak of 5.8% in Q1, and easing to 5.1% in 2016. The elevated level of core inflation suggests that the underlying inflation pressures persist.

  y/y inflation contribution to the y/y change in headline CPI m/m inflation
  Feb-15 Jan-15 Feb-15 Jan-15 Feb-15 Jan-15
Food and non-alcoholic beverages 6.4% 6.5% 1.0 1.0 0.4% 0.9%
Alcoholic beverages and tobacco 8.2% 7.4% 0.5 0.4 1.0% 0.3%
Clothing and footwear 5.8% 6.2% 0.2 0.2 0.4% 0.5%
Housing and utilities 5.6% 5.7% 1.3 1.4 0.0% 0.0%
Household contents and services 2.3% 2.4% 0.1 0.1 0.3% 0.3%
Health 5.9% 6.1% 0.1 0.1 3.2% 0.5%
Transport -6.3% -2.5% -1.1 -0.4 -2.5% -3.0%
Recreation and culture 2.9% 2.5% 0.1 0.1 0.3% 0.4%
Education 8.7% 8.7% 0.3 0.3 0.0% 0.0%
Restaurants and hotels 7.0% 7.4% 0.2 0.3 0.2% 0.1%
Miscellaneous goods and services 7.8% 7.3% 1.2 1.1 5.2% 0.6%
Headline CPI 3.9% 4.4%     0.6% -0.2%
Source: Staistics South Africa            

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