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Inflation Rises Amidst Escalating Costs in Fuel, Food, and Healthcare

Inflation Rises Amidst Escalating Costs in Fuel, Food, and Healthcare

South Africa’s Consumer Price Inflation (CPI) has marked an increase for the second month in a row, with notable surges in the prices of fuel, food, and healthcare.

Healthcare Costs Reach Four-Year Peak

The escalation in healthcare expenses has reached a rate not seen since November 2017. As per the latest data from Stats SA, the annual health inflation stood at 6.5% in September, a slight uptick from 6.2% in August. The past year saw medical product prices soaring by 7.5%.

Read also: Stable Interest Rates Offer Respite for South African Home Buyers

September’s CPI: A Closer Look

Stats SA’s recent release indicates that September’s CPI rose to 5.4%, up from 4.8% in August. This brings the rate back to where it stood in June. The transport sector, particularly fuel, played a significant role in this increase. The fuel index saw a 7.6% rise between August and September, with the price of inland 95-octane petrol surging by R1,71, hitting a 13-month peak at R24,54.

“After three consecutive months in negative territory, annual fuel inflation jumped from 11.7 percent in August to 1.5 percent in September,”the report highlighted.

Food and Beverage Prices: A Mixed Bag

While the annual rate for food and non-alcoholic beverages had been on a decline for the past five months, September saw a slight increase to 8.1% from 8.0% in August. Notably, meat, fish, oils, fats, fruit, and non-alcoholic beverages all experienced higher annual rates last month. In contrast, products like bread, cereals, sugar, sweets, desserts, vegetables, milk, eggs, and cheese saw reduced rates.

The poultry sector, in particular, felt the impact of the avian flu outbreak. As a result, producers began culling birds, leading to a rise in prices. Fresh whole chicken and chicken portions saw a 2.2% price hike, while non-IQF chicken portions became 1.9% more expensive. Interestingly, egg prices saw a 0.3% monthly increase, reversing a 0.4% decline from August.

“Prices for poultry-related products deserve a close watch in the coming months to gauge the impact of the avian flu outbreak.”

Hot beverages didn’t escape the inflationary trend either. Instant coffee, ground coffee, and rooibos tea prices jumped by 4.8%, 4.6%, and 3.7% respectively between August and September.

However, it wasn’t all upward trends. Bread and cereal prices decreased for the fifth month in a row, moving from 9.9% in August to 9.2% in September. Within this category, rice saw its rate decrease to 18.6% from 19.8% in the previous month. On the other hand, maize meal, instant noodles, and cakes and tarts recorded higher rates.

What Lies Ahead

With these fluctuations in prices across various sectors, South Africans will be keenly observing the economic landscape. The impact of external factors, such as the avian flu outbreak on poultry prices, will be particularly under scrutiny in the coming months.

CPI Trend 2018-2023

Year CPI Inflation Rate
2018 86.8 4.7%
2019 90.3 4.12%
2020 93.3 3.21%
2021 97.5 4.61%
2022 107.2 7.04%
2023 111.1 (as of August) 6.35% (average)

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