The December 2020 Consumer Price Index (CPI) release concludes the data points for the entire calendar year. The average annual inflation rate for 2020 was 3,3%. This is the lowest annual average rate since 2004 (1,4%) and the second lowest since 1969 (3,0%).
One of the reasons for low inflation in 2004, according to the South African Reserve Bank at the time, was a firmer rand, which strengthened from R7,56/$ in 2003 to R6,45/$ in 2004 (annual average).1
Annual inflation ended 2020 at 3,1% in December, slightly lower than November’s reading of 3,2%. The monthly increase in the CPI was 0,2%, up from 0% in November.
The food and non-alcoholic beverages category was the main driver of inflation in December, with a monthly increase of 0,5% and an annual rise of 6,0%. This was up from November’s annual reading of 5,8%.
Three food groups recorded above average annual and monthly price increases in December:
The December CPI carries the results of the latest survey for housing rentals, which is the source for actual and imputed rentals. Together, these components comprise almost 17% of the CPI basket. Houses registered a lower annual increase (1,0% for imputed rentals) than flats (1,9% for imputed rentals) and townhouses (1,7% for imputed rentals). The overall annual increase for imputed rentals was 1,1%. Actual rentals rose by 1,2%.
For more information, download the December 2020 Consumer Price Index (CPI) release here.
1 South African Reserve Bank, Annual Economic Report 2005, page 24 (download here).
Similar articles are available on the Stats SA website and can be accessed here.
For a monthly overview of economic indicators and infographics, catch the latest edition of the Stats Biz newsletter here.