Consumer prices slow to lowest in eight months
CONSUMER prices slowed to an eightmonth low last month as demand continued to be depressed by the Covid-19 pandemic in spite of the easing of the lockdown restrictions.
Data released by Statistics SA (StatsSA) yesterday showed that the annual headline inflation rate slowed to 2.9 percent in February, from 3.2 percent in January.
The print was below market expectations of an inflation rate of 3.1 percent for the month.
This was the lowest reading since June last year, when the rate was 2.2 percent, amid a slowdown in prices of food and non-alcoholic beverages at the height of the pandemic.
This is the third time in the past 12 months that the annual rate has slipped below the bottom end of the inflation target range of 3 to 6 percent set by the South African Reserve Bank. Inflation was below this 3 percent level in May and June last year.
StatsSA said the main contributors to the 2.9 percent annual inflation rate were food and non-alcoholic beverages, housing and utilities and miscellaneous goods and services.
Food and non-alcoholic beverages rose by 5.2 percent year-on-year, down from the 12-month high of 6 percent recorded in December.
Housing and utilities increased by 2.6 percent, and miscellaneous goods and services increased by 3.9 percent year-on-year.
Month to month, the consumer price index rose 0.7 percent, more than double that of the 0.3 percent month-on-month increase in January.
StatsSA said the reason for relatively high monthly changes, while the annual rate was lower than that recorded for most of the past 12 months, was that not all products in the CPI basket were surveyed every month.
Medical insurance, for example, is usually measured in February and again in April, and this has a large impact on the monthly change in the CPI in February, whereas there is a cancelling effect when it comes to the annual rate.