JOHANNESBURG - Consumer prices in South Africa slowed to an eight-month low in February as demand continued to be depressed by the Covid-19 pandemic in spite of the easing of restrictions.
Data from Statistics South Africa (Stats SA) today showed that the annual headline inflation rate slowed to 2.9 percent in February, from 3.2 percent in January.
The print was below market expectations of 3.1 percent inflation rate for the month.
This was the lowest reading since June last year when the rate was 2.2 percent, amid a slowdown in prices of food and non-alcoholic beverages at the height of the pandemic.
This is the third time in the past 12 months that the annual rate has slipped below the bottom end of the South African Reserve Bank (Sarb’s) inflation target range of 3 to 6 percent.
Inflation was below this 3 percent level in May and June last year.
Stats SA said the main contributors to the 2.9 percent annual inflation rate were food and non-alcoholic beverages; housing and utilities; and miscellaneous goods and services.
Food and non-alcoholic beverages rose by 5.2 percent year-on-year, down from the 12-month high of 6 percent recorded in December.
Housing and utilities increased by 2.6 percent while miscellaneous goods and services increased by 3.9 percent year-on-year.
Month to month, the consumer price index (CPI) rose by 0.7 percent, more than double that of the 0.3 percent month-on-month increase registered in January.
Stats SA said the reason for relatively high monthly changes, while the annual rate was lower than that recorded for most of the past 12 months, was that not all products in the CPI basket were surveyed every month.
Medical insurance, for instance, is usually measured in February and again in April, and this has a large impact on the monthly change in the CPI in February, whereas there is a cancelling effect when it comes to the annual rate.
Stats SA said health inflation had slowed over the past year as the average annual increase across medical aid schemes in February was 4.7 percent, substantially lower than the rate recorded a year ago of 9.6 percent.
Medical insurance is the single biggest item in the CPI basket, taking up 7.6 percent of total household spending.
“The price data for both medical services and medical insurance show that households are paying, on average, 4.3 percent more for medical-related products and services than they did a year ago.
“This increase is lower than the annual rate recorded in February 2020 of 9.0 percent.”
Meanwhile, fuel prices recorded a month-on-month rise in prices in January after four-consecutive months of price decline.
Stats SA said prices increased further in February, rising by 5.2 percent month-on-month.
The price of inland 95-octane petrol increased by 81 cents to R15.67 a litre between January and February.
“Despite this increase, the price is still lower than the R16.03 per litre motorists paid in February 2020,” it said.
BUSINESS REPORT ONLINE