Photo by: Reuters
Annual consumer price inflation slowed dramatically to 5.4% in June from 6.3% in May.
The last time consumer inflation was within the Reserve Bank's target range of 4% to 6% was more than a year ago. This may help to convince the monetary policy committee not to hike interest rates on Thursday.
June's inflation data was also the lowest level in 20 months, Statistics SA reported. The CPI increased by only 0.2% from April to June 2023.
The annual inflation rate for goods was 6.3%, down from 8.0% in May and for services it was 4.5%, down from 4.6% in May.
Lower fuel prices contributed to the much softer inflation number, with annual transport inflation tumbling from 7.0% in May to 1,8% in June, dragged lower mainly by softer fuel prices. The fuel index was 8.3% lower in June 2023 than in June 2022.
Food and non-alcoholic beverages prices also cooled for the third month in a row – from 14% in March to 11% in June. Most food categories saw slower price growth, with some products actually becoming cheaper - the average price of a 750 ml bottle of sunflower oil was R35.57 in June, from almost R44 a year ago, for example.
However, Statistics SA reports that prices for sugar, sweets and desserts increased from 11.9% to 16.4%. Prices for brown sugar (+17.4%), white sugar (up 17.1%) and chocolate slabs (up 16.2%) saw the biggest hikes. Wine (+9.4%) and beer (+5.5%) prices also saw sharper increases.
The latest CPI number shows that residential rent increased by 2.7% in June compared to a year ago. Over the past quarter, rent prices increased by 1.2% - the biggest hike in almost five years.