It’s GOOD NEWS for embattled consumers as inflation stabilises

Not only is the South African Rand rallying during the 15th BRICS Summit, but it’s more good news for consumers as inflation stabilises for the second month running. Business Tech reports that this year-on-year decline for headline inflation in July 2023 will provide much-needed relief for South African consumers.

INFLATION STABILISES

The South African Reserve Bank (SARB) has a current inflation target range of between 3% and 6%. According to the latest stats for July 2023, annual consumer price inflation (CPI) dropped from 5.4% in June, to 4.7% in July. CPI is now at its lowest point since July 2021.

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While inflation stabilises, experts say fuel prices were largely to blame for inflation reaching a 13-year high of 7.8% in July 2022, with transport contributing 44% to the overall inflation rate. However, since that peak, fuel prices have eased off, dropping from a height of R26.74 per litre in July 2022, to R22.46 per litre in July 2023.

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Unfortunately, a massive fuel-price hike for September is expected to tilt the balance back again, says Stats SA, so embattled South Africans should enjoy the reprieve while they can. Likewise, Eskom’s tariff hike in July means, on average, households are paying 14.5% more for electricity, which is negating some improvement, too.

FOOD PRICES

Food inflation stabilises in July, too, dropping from 11.0% in June to 9.9% in July. Inflation for bread and cereals dropped from 15.5% in June to 13.1% in July.

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Annual meat inflation eased to 5.1% – the fifth consecutive month of decline. We look forward to seeing if these drops reflect positively for consumers in our monthly grocery basket story.

WHAT WENT UP IN JULY?

As inflation stabilises overall, some food items have still increased:

• Milk, eggs and cheese increased by 0.3% to 14.4% in July.
• Hot beverages (coffee and tea) increased by 0.3% to 9.0% in July.
• White sugar increased by 0.3% to 20.8% in July (22.8% for brown sugar).
• Sweets and chocolates increased by 2.3% to 18.7% in July (the highest reading for this category since May 2017).
• Alcohol beverages increased by 0.9% to 7.8% in July.

Are you battling to do all your shopping each month? Which items did you used to purchase regularly but just can’t afford anymore? Feel free to share with our audience in the comments section below.

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