CONSUMER INFLATION LOWEST IN TWO YEARS
Annual consumer inflation slumped to 4,7% in July from 5,4% in June. The rate in June is the lowest reading in 20 months (since October 2021) when the rate was 5,0%. The main contributors to the CPI decrease include food and non-alcoholic beverages and miscellaneous goods and services. Most food groups recorded lower inflation rates in June with the exception of vegetables, fruit and sugar, sweets and desserts.
According to Statistics SA, consumer prices increased on average by 0,9% between June and July 2023, up from the monthly rise of 0,2% recorded in May and June.
Transport was the star in July, tapping the brakes on overall inflation after being a major upward driver of inflation. In 2021 and 2022, overall inflation was mainly pushed higher by transport.
The easing inflationary pressures in South Africa are encouraging for the economy, as lower inflation can stimulate consumer spending and promote economic growth. While food inflation remains a concern, the downward trend offers hope for improved affordability and a positive impact on consumers’ purchasing power.