By Lehlohonolo Lehana.
The Annual consumer price inflation rose to 5.3% in January from 5.1% in December last year, the first jump after two-consecutive months of moderation.
This is marginally higher that the 5.2% rise expected by 18 economists surveyed by Bloomberg.
The latest headline consumer inflation was announced by Stats SA on Wednesday and came ahead of the budget speech by Finance Minister Enoch Godongwana.
The budget is due to be tabled on Wednesday afternoon.
Chief Director for Price Statistics at Stats SA, Patrick Kelly, says the categories in the CPI basket with the largest annual price increases were restaurants and hotels, food and non-alcoholic beverages, and health.
Kelly says while the fuel prices were lower in the month, they remain higher than a year ago.
“A monthly decline of 5.2% in fuel prices between December and January was not enough to subdue the annual rate for fuel, which jumped from -2.5% in December to 3.3% in January. This contributed to a sharp rise in annual transport inflation to 4.6% from 2.6% in December.
“Inflation for several transport categories cooled in January. With the festive season over, public transport tariffs decreased by 2,0% in January compared with December, dragged lower by monthly price decreases for long-distance busses (down 21.2%), car rental (down 12.1%) and airfares (down 4.1%),” says Kelly.
He says prices for the restaurants and hotels group increased by 8% in the 12 months to January, up from December’s print of 7%.
“Restaurant-related product groups that recorded relatively high annual increases in January included fish & seafood products (up 9,9%), red meat-based products (up 9,7%) and hamburgers (up 8,6%).
After rising during the festive season, hotel room rates decreased by 2,1% between December and January. Despite this decline, hotel rooms remain more expensive than a year ago, with prices increasing by 10,7% in the last 12 months,” he says.
At the same time, the annual inflation for food and non-alcoholic beverages slowed to 7,2% in January from 8,5% in December and 9,0% in November.
The annual inflation for bread and cereal products also declined from 7.5% in December to 6.5% in January.
Meat inflation was also softer, cooling from 3.9% to 2.2%.
The data means inflation has moved further away from the 4.5% midpoint of the Reserve Bank’s target band, where it prefers to anchor expectations. It is, however, still within the central bank’s 3% to 6% range.
In January, the Monetary Policy Committee kept interest rates on hold at 8.25% in its first meeting of the year, having left the benchmark rate unchanged at a 14-year high for the past nine months. This was after annual consumer price inflation eased for a second month to 5.1% in December.