Annual consumer price inflation was 4,5% in June 2019, unchanged from May 2019. The main contributors to annual inflation were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and services.
Housing and utilities make up almost one quarter of the total consumer price index (CPI) in terms of weight (or relative importance). Most of this is housing rentals and the opportunity cost of owning and living in your own home. These indices are compiled using the inflation of actual rentals.
Housing inflation has slowed over the last three years. Due to the large weight of this category, this slowdown has dampened headline inflation, anchoring it at lower levels. In particular, owner’s equivalent rent has fallen from an average of 4,9% in June 2017 to 3,3% in June 2019.
Annual food and non-alcoholic beverages inflation was 3,7% in June 2019, up from 3,2% in May. Meat prices showed the first year-on-year increase in five months. Significant monthly increases were seen in beef mince (up 2,1%), beef steak (up 1,4%) and sausages (up 1,7%).
Prices for sugar and sweet products have climbed sharply over the past 12 months. In June 2018, prices were falling at a rate of 5,3% per year. In June 2019, the annual price increase was 8,2%.
Annual non-alcoholic beverages inflation was 7,3% in June, up from 6,9% recorded in May.
If drinking chocolate is your preferred beverage this winter, it might come as a surprise to learn than prices for drinking chocolate have climbed by only 1,5% over the 12 months to June, slightly faster than ground coffee (up 1,4%), but slower than other warm beverages such as black tea (up 4,2%) and rooibos (up 11,3%).
If we break this down by province, the average price of 500g of drinking chocolate in Free State was R52,74 in June 2019, cheaper than the R57,63 recorded for Western Cape.
Alcoholic beverages and tobacco have also seen strong inflation this year, although this is partly seasonal. More than three-quarters of the annual increase of 6,1% (recorded in June) has accumulated since January.
Download the Consumer Price Index (CPI) release for June 2019 here.
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