May inflation still below 3%, but meat and other food much pricier
• For more financial news, go to the News24 Business front page.
For the third month in a row, consumer price index (CPI) inflation remained below 3% - the bottom level of the SA Reserve Bank's target band.
CPI came in at 2.8% for May – unchanged from April and exactly in line with the expectations of economists polled by Reuters.
But food prices are heating up.
In May, food and non-alcoholic beverages were 4.8% more expensive than a year ago - the biggest annual increase in more than a year.
Beef was a big contributor, as foot-and-mouth disease, combined with higher feed prices, fuelled price hikes, Statistics SA says.
In a single month, from April to May, large price hikes were seen in beef steak (+4.5%), stewing beef (+2.5%) and beef mince (+1.7%).
Annual inflation for meat surged from 3.0% in April to 4.4% in May.
Fish prices are also on the rise, with hake now 9.1% and fish fingers 6.1% pricier than a year ago.
Maize meal (+14%) and samp (21%) are also still much more expensive than a year ago.
After prices for oils and other fats cooled in recent months, this picked up in May again. Sunflower oil was 7.6% pricier than a year ago and brick margarine 7.9%.
Statistics SA noted that vegetable prices were volatile, but that May saw the biggest annual price increase (more than 10%) in 18 months. While coffee and tea prices are cooling, prices are still 12.4% higher than a year ago - from 15% in April.
Statistics SA
In May, electrician rates were updated, with services 7.9% more expensive than a year ago.
Much cheaper fuel kept May's inflation number in check. Petrol prices were 16% and diesel almost 13% lower than a year before.
Fuel has benefitted from falling oil prices, but this came to an abrupt halt on Friday after Israel's attacks on Iran. Traders are nervous that oil supplies from the Middle East may be disrupted by escalating tensions.
On Wednesday morning, Brent oil was trading at around $75 a barrel – from an average of below $64 in May.
SA diesel and fuel prices are currently on track for small hikes in the first week of July.
The SA Reserve Bank has been pushing hard to lower SA's inflation target to 3% (from a band of 3% to 6%), and recently pointed out that the current inflation rate is lower than that of Japan (3.6%), making this an opportune time.
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