Inflation quickens for a second month in a row

Inflation quickens for a second month in a row

South Africa’s annual inflation rate was 4,5% in January, higher than that recorded in December (4,0%) and November (3,6%). This places inflation right on the 4,5% midpoint of the South African Reserve Bank’s monetary policy target range.


The main contributors to the 4,5% rate were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and services.

Each January there is a spike in monthly food and non-alcoholic beverages inflation following typically milder pressure in December. This January saw an increase of 1,2% month-on-month compared with 0,4% in December.

Maize prices rose 1,5% between December and January. The annual increase for maize is high relative to overall inflation at 16,0%, but this is slightly down from December’s annual figure of 17,8%.

Although the fuel price component of the CPI dropped by 0,3% between December and January, its annual rate shot up to 13,7% from a previous 2,4%. This was the result of a low base, created by substantial declines in December 2018 and January 2019.

Why is this fuel price pattern interesting? Well, as noted above, the CPI headline rate rose from 4,0% in December 2019 to 4,5% in January 2020, a difference of 0,5. Transport alone contributed 0,4 out of the 0,5, entirely because of the dynamics of the fuel price.1

The end of the festive season saw a slowdown in holiday-related prices. Public transport tariffs decreased by 3,5% in January compared with December. Car rental fees fell by 16,7%, airfares by 9,7% and long distance bus fees by 34,4%. Holiday accommodation rates were also down with decreases recorded for hotels (-2,0%) and for bed & breakfasts and guesthouses (-0,7%).


For more information, download the latest Consumer Price Index (CPI) release here.

1 Readers wanting further information should see Table C of the CPI statistical release, which shows the contribution of transport to the headline CPI, measured in percentage points: 0,9 in January, up from 0,5 in December, which is an increase of 0,4.

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