Inflation for 2020 was the lowest in 16 years and the second lowest in 51 years

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:

  • Meat prices rose by 7,3% from a year ago and by 1,2% from November. Stewing beef was 2,9% more expensive than it was in November 2020 and 12,4% more expensive than in December 2019.
  • Prices in the oils and fats category climbed by 10,2% over 12 months and by 1,6% over one month. Cooking oil prices increased by 11,3% since December 2019 and by 2,9% between November 2020 and December 2020.
  • Inflation in sugar, sweets and dessert products recorded an annual rise of 8,4% and a monthly rise of 1,1%. White sugar prices increased by 1,1% over the month and by 10,0% over the year.

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).

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