Jason Woosey|Published
South Africa’s annual consumer price inflation edged up to 4.5% in September, from 4.4% in August, as the fuel price crisis sent transport costs spiralling.
The latest Consumer Price Index (CPI) figures, released by Statistics South Africa (Stats SA) on Wednesday, showed that transport had contributed 1.5 percentage points to the month’s inflation figure.
However, the headline inflation figure was still lower than expected, with many key analysts having forecast CPI to rise to around 4.6% to 4.7% year on year.
Transport costs increased by 10.8% year on year, according to Stats SA. Between January and September, the price of petrol increased by R6.13 per litre, while the cost of 500ppm diesel surged by R10.66 after the Middle East war sent oil prices spiralling.
However, it wasn’t bad news on all fronts, as inflation in food and non-alcoholic beverages increased by just 1.2% year on year and fell by 0.1% month on month.
Health costs increased by 3.2% year on year, while insurance and financial services rose by 5.4% and housing and utilities by 5.2%. The latter contributed 1.3 percentage points to overall CPI inflation. However, there was some positive news, as rental inflation slowed from 4.1% to 3.9% year on year.
Johann Els, senior economist at PSG, said there was still very little evidence of second-round inflationary pressure.
“Apart from the direct impact of higher petrol prices, there have been some increases in transport costs, including taxis and public transport, but little evidence of broader price pressures elsewhere. This will be welcomed by the Reserve Bank,” Els said.
He expects inflation to rise to slightly above 5% in October and November, while base effects should start bringing inflation down again from around April next year.
“By the second half of 2027, we could be back around 3%, or even lower. Much will depend on the extent of the decline in oil prices that I expect next year, and the resulting reduction in petrol prices,” Els added.
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