Annual consumer inflation eased to 4,9% in June after recording a 30-month high of 5,2% in May. The monthly increase in the consumer price index (CPI) was 0,2%, up from 0,1% in May but lower than the 0,5% rise recorded between May and June 2020.
If annual consumer inflation is recalculated with the exclusion of food & NAB (non-alcoholic beverages) and fuel, it comes to 3,4% in June.1 This is well below the 4,9% headline rate, indicating that these products are important drivers of inflation.
Fuel records third month of double-digit inflation
Fuel prices increased by 27,5% in June compared with the same month last year. This is lower than the May rise (37,4%) but higher than the reading in April (21,4%).
These relatively high rates come off a low base recorded during the second quarter of 2020 when fuel prices were depressed.
To illustrate this, the chart below shows how quickly the price of inland 95-octane petrol dropped during the COVID-19 lockdown last year. The price slumped to R12,22 per litre in May 2020, the lowest reading since September 2016 (R12,17). The price experienced a rebound in June 2020 (R13,40), eventually rising to R17,32 in April 2021, before falling slightly to R17,13 per litre in June 2021.2
On a month-on-month basis, fuel prices dropped by 0,2% between May 2021 and June 2021. The price of inland 95-octane petrol edged lower by 10c a litre in the month. Diesel prices, on the other hand, increased by an average of 0,7%.
Diesel recorded an annual increase of 25,5% in June, lagging behind petrol’s rise of 28,2%. The average price for a litre of diesel in June was R16,31 per litre.
Prices of oils and fats continue to surge
Annual food & NAB inflation was unchanged from May, remaining steady at 6,7% in June, but there was an average price increase of 0,2% between May and June.
The three food groups that registered the highest annual increases in June were oils & fats, meat, and sugar, sweets & desserts.
Oils & fats have seen steadily increasing prices since February 2019, when an annual rise of 1,2% was recorded. In June 2021, the annual increase was 21,6%. Cooking oil products in particular have recorded sharp increases. In June 2020, the average price of a 750 ml bottle of sunflower oil was R20,99, rising to R29,45 in June 2021.
Meat inflation continued to accelerate too, reaching an annual rate of 8,6% from a 12-month low of 4,1% in August 2020. Lamb prices increased by 10,9%, stewing beef by 16,7% and pork by 10,5%.
The sugar, sweets & desserts index rose by an annual rate of 7,2% in June 2021, lower than the 8,7% recorded in May 2021. This category has seen price rises slowing from a high of 9,7% in October 2020.
Accommodation inflation edges higher
Stats SA records housing rentals every quarter, with the latest survey taking place in June. This component accounts for a sizable chunk (17%) of the inflation basket, and includes actual and imputed rentals.
Actual rentals increased by 0,4% and imputed rentals by 0,6% in June. In March 2021 both actual and imputed rentals dipped by 0,2%, and in June 2020 both increased by just 0,1%.
In June 2021, actual rentals increased for houses (+0,5%) and townhouses (+0,3%). Rentals for flats, however, declined by a marginal 0,1%.
For more information, download the June 2021 Consumer Price Index (CPI) release here.
1 See Table A of the CPI release for this and other supplementary inflation measures.
2 Department of Mineral Resources and Energy. Comparing prices for petrol, diesel and illuminating paraffin (IP) (click here).
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