Inflation ticks up to 3% in June on the back of higher food prices
Annual consumer
On a month-on-month basis, consumer prices were up 0.3% in June compared with a 0.2% increase the previous month.
The main contributors to the year-on-year increase were food and non-alcoholic beverages, which reached a 15-month high of 5.1%, adding 0.9 percentage points to the overall rate.
Alcoholic beverages and tobacco followed, rising to 4.4% and contributing 0.2 percentage points. Housing and utilities inflation also accelerated to 4.4%, adding 1.0 percentage points to the headline number. The rate for goods was also higher at 2.3% from 1.8% in May, while the services component edged up to 3.7% from 3.6%.
The only dampener for June inflation was the transport category, which contributed -0.5 percentage points to the overall rate. Economists said this was because petrol prices fell more slowly — by just 0.2% in June compared with 1.1% in May and 1% in April — as higher Brent crude oil prices offset the modest appreciation of the rand.
The inflation rate is still within the
'Such low inflation provides considerable support for consumers given that most wage increases are higher than this low prevailing rate of inflation,' said Elna Moolman, head of macroeconomic research at Standard Bank.
'It also arguably supports the case for the Reserve Bank to cut interest rates further at the upcoming monetary policy meeting next week.'
Nedbank economists expect annual inflation for 2025 to rise gradually off a low base, but to remain relatively contained as a result of 'a surprisingly resilient rand, much lower global oil prices, the gradual easing in domestic supply-side constraints, and limited demand pressure on prices'.
'Given a relatively favourable inflation outlook, the South African Reserve Bank reduced interest rates by a further
The central bank's monetary policy committee — which meets once every two months to decide on interest rates — will have its next discussion next week.
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