April inflation slightly higher than expected - economist
South Africa’s consumer inflation came in slightly higher than anticipated in April, rising to 2.8% from 2.7% in March, according to data released by Statistics South Africa on Wednesday.
Azar Jammine, chief economist at Econometrix, says the unexpected increase was largely due to a sharper-than-forecast rise in food prices, particularly in the meat, coffee, cooking oil, and margarine categories.
"The figures came in slightly higher than anticipated, mainly as a result of a bigger increase in food inflation than one had expected, but we’re still sitting with an inflation rate that is significantly below the lower end of the inflation target of 3 to 6 per cent."
The Consumer Price Index (CPI) rose 0.3% month-on-month, driven by increases in food and non-alcoholic beverages. Hot beverage inflation reached 15.2%, its highest since September 2024, with instant coffee prices surging 20.2% year-on-year.
Jammine noted that global supply issues are keeping commodity prices elevated.
"Coffee and cocoa prices worldwide have been elevated over the past year because of problems in the production of these products in the coffee and cocoa growing regions of the world. And so one should expect high prices to continue filtering through in the coming months."
Despite the pressure from food costs, Jammine said consumers should not be discouraged.
He pointed to a likely fuel price cut in June as a key factor that could ease inflation in the future.
"The fact is that fuel prices are set to be decreased yet again at the beginning of June, and that will assist in suppressing the inflation rate for another few months. It does open the opportunity for the Reserve Bank to provide some further interest rate relief."
ALSO READ
