South Africa’s headline annual consumer price inflation accelerated for the fourth consecutive month in June, but came in well below market expectations, giving some breathing room to rate setters who struggle to find a balance between rising inflation and lacklustre economic growth.
June’s inflation edged up to a 6-month high of 4.7% y/y from 4.6% y/y in May, driven by transport costs, which returned to growth, data from Statistics South Africa showed. The consensus view was for 5%, according to a Business Day survey. The monthly inflation ticked up to 0.4% from 0.3%.
The central bank is due to announce its rate decision on July 23 and most analysts expect it to hike the key repo rate by 25bp after holding it at 5.75% for a year.
The annual core inflation, which excludes the prices of food, non-alcoholic beverages, petrol and energy eased to 5.5% last month from 5.7% in May, suggesting somewhat reduced inflationary pressures. The monthly core inflation nudged up to 0.3% from 0.2%.
| y/y inflation | contribution to the y/y change in headline CPI | m/m inflation | ||||
| June-15 | May-15 | June-15 | May-15 | June-15 | May-15 | |
| Food and non-alcoholic beverages | 4.7% | 4.7% | 0.7 | 0.7 | 0.4% | 0.6% |
| Alcoholic beverages and tobacco | 9.7% | 9.7% | 0.5 | 0.5 | 0.2% | 0.6% |
| Clothing and footwear | 5.6% | 5.4% | 0.2 | 0.2 | 0.4% | 0.3% |
| Housing and utilities | 5.4% | 5.6% | 1.3 | 1.3 | 0.7% | 0.0% |
| Household contents and services | 2.3% | 2.6% | 0.1 | 0.1 | 0.9% | 0.1% |
| Health | 6.0% | 7.0% | 0.1 | 0.1 | -0.3% | 1.2% |
| Transport | 0.7% | -0.7% | 0.1 | -0.1 | 1.4% | 0.3% |
| Recreation and culture | 2.0% | 1.8% | 0.1 | 0.1 | 0.3% | 0.0% |
| Education | 9.3% | 9.3% | 0.3 | 0.3 | 0.0% | 0.0% |
| Restaurants and hotels | 6.1% | 6.4% | 0.2 | 0.2 | 0.3% | 0.9% |
| Miscellaneous goods and services | 7.2% | 7.4% | 1.1 | 1.1 | -0.1% | 0.2% |
| Headline CPI | 4.7% | 4.6% | 0.4% | 0.3% | ||
| Source: Staistics South Africa | ||||||
Related Articles
South African court rules Bitcoin qualifies as "capital", "money" under exchange controls
The South Gauteng High Court in Johannesburg has ruled that Bitcoin constitutes both “capital” and “money” under South Africa’s exchange-control framework, in a landmark judgment that could ... more
Ghana to evacuate 161 citizens from Cambodia as fake deportation scare spreads
Ghana has evacuated 85 citizens from Cambodia and is arranging the return of another 76, authorities said, amid concerns sparked by a fake online notice falsely claiming African nationals faced ... more
Kenya Airways and Rubis Energy to build Africa’s first sustainable aviation fuel refinery in Kenya
Flag carrier Kenya Airways Plc (NSE:KQ) and Rubis Energy Kenya, a subsidiary of Rubis SCA (EPA: RUI), a French energy group, have signed a memorandum of understanding to develop Africa’s first ... more