Inflation heats up as fuel, meat prices rise

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South Africa's consumer price inflation increased to 4.9% in August, up from 4.6% in July 2021.
South Africa's consumer price inflation increased to 4.9% in August, up from 4.6% in July 2021.

South Africa's consumer price inflation increased to 4.9% in August, up from 4.6% in July 2021.

The August CPI number is the fourth consecutive month where the annual increase in inflation is higher than the midpoint (4.5%) of the South African Reserve Bank’s inflation target range.

Source: Statistics SA

This was in line with the median expectation of 16 economists who took part in a Bloomberg poll.

Pricier petrol and diesel, as well as increases in vehicle prices, contributed to the hotter inflation.

Fuel prices are currently at record highs - with the price of inland 95-octane petrol reaching R18.30 per litre last month. Fuel prices increased by 4.9% between July and August, and by 19.6% over the last 12 months.

Vehicle prices increased at a rate higher than overall inflation across all 16 months from May 2020 to August 2021, Statistics SA said. There was also a sharp 22% spike in airfares between July and August, which contributed to transport inflation.

Source: Statistics SA

Prices of food and non-alcoholic beverages rose by 6.9% - the highest level of food inflation since June 2017 when it was also 6.9%.

But Statistics SA says there are signs that food inflation may be slowing down.

While meat prices are still climbing - up almost 11% in August, prices for bread and cereal products fell by 0.5%. Maize meal prices decreased by 1.2% and white bread by 1.1%. Cooking oil prices dipped by 0.4% and margarine by 0.8% month-on-month.

The Reserve Bank's monetary policy committee is meeting this week, and is expected to announce its interest rate decision on Thursday. No change is expected.

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