Statistics South Africa data released on Wednesday showed that the CPI annual rate was 5.1% in June compared with 5.2% in May
Annual inflation eased in June to 5.1% from 5.2% in May, according to data from Statistics South Africa.
On a month-on-month basis, consumer inflation also slowed to 0.1% in June from 0.2% in May.
The main contributors to the year-on-year slowdown were housing and utilities, food and non-alcoholic beverages and transport.
The latest reading means inflation has remained within the 5% to 6% range for the past 10 months, said Patrick Kelly, the chief director for price statistics at Stats SA.
“After stalling at 4.7% in April and May, the annual rate for food and non-alcoholic beverages edged lower to 4.6% in June. Food and non-alcoholic beverages inflation has declined from its recent peak of 14% in March 2023. June’s reading is the lowest since September 2020, that was 45 months ago, at the peak of the Covid-19 lockdown when the rate was 3.8%.”
He said several food and non-alcoholic beverages categories registered lower annual inflation rates in June, including sugar, sweets, vegetables, fruits, milk, eggs, cheese and fish.
Economists at the Bureau for Economic Research correctly predicted a slight downtick in headline inflation to 5.1% in June.
“Price pressure is set to slow further during the second half of the year, with CPI expected to average around 4.8% for the full year – down from 6% in 2023. We expect CPI to slow to the midpoint of the Sarb [South African Reserve Bank] target by the end of the third quarter and to stay below that level through the fourth quarter,” the bureau said.
Nedbank economists also correctly predicted the inflation print for June saying the slightly lower annual rate was supported by a decrease in fuel prices and a stronger rand.
“The petrol price fell sharply by 4.1% month-on-month in June, helped by a steady price of Brent crude oil combined with a significant appreciation of the rand. The rand was supported by the formation of the government’s national unity, which is widely expected to accelerate structural policy reforms that will boost the economy,” the Nedbank said.
Last week the central bank left the repo rate — at which it lends to commercial banks — unchanged at 8.25%, but hinted at an imminent interest rate cut despite flagging upside risks to inflation.
It said for the year, headline inflation is expected to average 4.9%, slightly lower than the 5.1% expected during the May meeting of its monetary policy committee.
In 2025, inflation is forecast to average 4.4% from the 4.5% predicted previously, while the 2026 forecast remains unchanged at 4.5%.