Annual inflation climbs amid higher fuel, health costs
J– Annual consumer price inflation rose to 5.3 per cent in January from 5.1 per cent in December last year, the first jump after two-consecutive months of moderation.
This is marginally higher that the 5.2 per cent rise expected by 18 economists surveyed by Bloomberg.
The categories in the CPI basket with the largest annual price increases were restaurants and hotels at 8 per cent, food and non-alcoholic beverages (NAB) at 7.2 per cent and health at 6.5 per cent.
Food
Annual inflation for food and NAB slowed to 7.2 per cent in January from 8.5 per cent in December and 9 per cent in November, Statistics SA said. All sub-categories recorded lower annual rates, apart from sugar, sweets and desserts, oils and fats and cold beverages.
Annual inflation for bread and cereal products declined from 7.5 per cent in December to 6.5 per cent in January. Meat inflation was also softer, cooling from 3.9 to 2.2 per cent.
A monthly decline of 5.2 per cent in fuel prices between December and January was not enough to subdue the annual rate for fuel, which jumped from a decline of 25 per cent in December to 3.3 per cent in January.
This contributed to a sharp rise in annual transport inflation to 4.6 per cent from 2.6 per cent in December.
The consumer price index increased by 0.1 per cent in January 2024, Statistics SA reported.
Expectations
The data means inflation has moved further away from the 4.5 per cent 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 per cent range.
In January, the Monetary Policy Committee kept interest rates on hold at 8.25 per cent 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 per cent in December.