By Lehlohonolo Lehana.
Annual consumer price inflation (CPI) reached 7.8% in July 2022, Statistics South Africa (Stats SA) said on Wednesday.
This was a 1.5% increase from the 7.4% recorded in June 2022.
It remains at a level last seen during the global financial crisis and is now the fastest inflation of Lesetja Kganyago’s tenure as central bank governor.
Kganyago has told lawmakers that headline inflation may be nearing a peak, though growing underlying price pressures may see the MPC continue its aggressive interest-rate hiking cycle.
The agency said the main contributors to the 7.8% annual inflation rate were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and services.
“Food and non-alcoholic beverages increased by 9.7% year-on-year, and contributed 1.7 percentage points to the total CPI annual rate of 7.8%.
“Housing and utilities increased by 4.0% year-on-year, and contributed 1.0 percentage point. Transport increased by 25.0% year-on-year, and contributed 3.4 percentage points. Miscellaneous goods and services increased by 3.6% year-on-year, and contributed 0.5 of a percentage point,” said Stats SA.
In July, the annual inflation rate for goods was 11.5%, up from 11.0% in June; and for services, it was 4.2%, up from 3.9% in June.
On the collection of price data from retail stores, Stats SA obtains prices from retailers through fieldwork collection and online collection.
“The paper forms used by fieldworkers are being replaced by tablets, which provide a custom application that includes quality control and management modules. The new collection method for fieldwork will be implemented from July 2022 to March 2023 and is expected to improve the quality and speed of data collection and processing,” it said.
Earlier in August, the Bureau for Economic Research (BER) noted that households could be in for some respite in the coming months as petrol and food prices are set to cool off.
According to the BER, the easing of oil prices – which has continued through the mid-month period and through to today – will have another knock-on effect, suggesting that the country may have seen the peak of the inflationary cycle for both fuel and food, it said.
The Pietermaritzburg Economic Justice & Dignity group (PMBEJD), meanwhile, also noted a tapering off in food prices month-to-month, suggesting an end to accelerating inflation.
Investec chief economist Annabel Bishop said that falling food and energy prices since the end of Q2.22 have contributed to a moderation in commodity prices overall, subduing pressure on the CPI inflation rate.