CPI

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 South Africa’s June 2022 Consumer Price Index

By Qaqamba Matundu

Consumer price inflation raced to 7.4% in June from 6.5% in May, 1,1% month-on-month in June 2022.

“This is the highest reading since January 2017 when the rate was 6.6%, with inflation now higher than the upper limit of the South African Reserve Bank’s monetary policy target range of 6%, pointing to further interest rate hikes in July” says BusinessTech.

Consequently, the trend pointed up mildly, with annual average inflation coming in at 5.7% in June (May: 5.5%). Lastly, core inflation rose to 4.4% in June, from May’s 4.1%. The result was driven by rising prices for housing and utilities and transportation says focus economics.

Food and non-alcoholic beverages increased by 8.6% year-on-year and contributed 1.5 percentage points to the total CPI annual rate of 7.4%, said Stats SA.

Stats SA chief director for price statistics Patrick Kelly said if annual consumer inflation is recalculated without including food and non-alcoholic beverages and fuel, inflation comes to 3.4% in June. "This is well below the 4.9% headline rate [for June], indicating that these products [food, non-alcoholic beverages and fuel] are important drivers of inflation,” said Kelly.

“Housing and utilities increased by 5.1% year-on-year and contributed 1.2 percentage points. Transport increased by 20.0% year-on-year and contributed 2.7 percentage points. Miscellaneous goods and services increased by 4.0% year-on-year and contributed 0.6 of a percentage point. In June, the annual inflation rate for goods was 11.0%, up from 9.5% in May; and for services it was 3.9%, up from 3.6% in May,” it said. – SAnews.gov.za

The rising consumer price inflation leads to adjustments in the cost of living and income. In June, the annual inflation rate for goods was 11.0%, up from 9.5% in May; and for services it was 3.9%, up from 3.6% in May says statsSA.

eNCA reported that, "Inflation has soared to the highest level in decades in many countries, fueled by the war in Ukraine and the easing of Covid restrictions.That has forced central banks to raise interest rates, risking the prospect of recession as higher borrowing costs hurt businesses and consumers.”


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