By Lehlohonolo Lehana.
The monthly inflation rate eased again in December, dropping 0.4 percentage points to 5.1 percent as food price hikes slowed, official data showed Wednesday.
The median expectation of a Bloomberg survey of economists was 5.2%.
The average inflation rate for 2023 was 6.0 percent, 0.9 percentage points lower in 2022 and matching the upper limit of the central bank’s official target range, national statistics agency StatsSA said.
December’s inflation decrease was driven by a decrease in fuel prices, which lowered the cost of transport.
Prices for food and non-alcoholic beverages, household contents and services, and recreation and culture also fell in December.
Bread and cereal prices fell by 0.2% from November to December but remain 7.5% higher than a year ago.
Maize meal prices eased by 0.9% from November to December, with the average price of a bag of maize meal (2.5 kg) declining from R37.04 in November to R36.64 in December, Statistics SA reported.
But meat prices ticked higher – to 3.9% in December from 3.5% in November. As bird flu continues to ravage South Africa, the price of fresh chicken portions are now almost 15% higher than a year ago.
The milk, eggs and cheese price index increased by 14.5% in the 12 months to December, higher than November’s rate of 13.9%. Egg prices were 38% more expensive in December 2023 than a year before, down slightly from 39.9% in November.
But even though the inflation rate eased, it’s not where the SA Reserve Bank (SARB) wants it.
The central bank has set a target for inflation of between three and six percent and kept its main interest rate unchanged at 8.25 percent in November.
The Reserve Bank’s monetary policy committee is meeting this week and will announce its decision on interest rates on Thursday. Most economists expect rates to remain unchanged.