By Ragheema Mclean
Statistic SA has revealed that South Africa’s annual consumer inflation accelerated in February, reaching 5.6% from 5.3% in January and 5.1% in December.
Market expectations were for a flat to marginally higher print (5.3%-5.4%), with only outliers anticipating anything higher.
The consumer price inflation (CPI) has risen for a second consecutive month, driven by product categories such as housing and utilities, food, and non-alcoholic beverages, as well as transport. Potatoes, eggs, and sweet potatoes saw the sharpest price increases in the 12 months to February.
A notable 10.3% month-on-month increase in medical aid premiums was also recorded.
Economist Dawie Roodt, speaking on VOC’s Ramadhan AM, noted that while the increase was slightly higher than market expectations, it was not surprising given the underlying trends.
Roodt suggested that inflation is likely to stabilize and then gradually decrease, citing base effects as a key reason.
“Inflation is compared to a year ago, and last year’s increases are expected to push inflation down.”
Roodt also mentioned that inflation expectations in the South African economy have been decreasing, which could help mitigate future inflationary pressures.
Meanwhile, he also cautioned that the 5.6% increase in inflation would impact the average South African differently based on individual consumption patterns.
“When I talk about inflation, it must be seen as an average increase in prices, for example in services, food, rent etc. There are many things included in this basket of things.”
“We all have different consumption patterns and therefore everyone’s inflation rate will not be the same.”
VOC News
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