Inflation slows to 5.4% in June

Patrick Kelly, the Chief Director for Price Statistics, says this is the lowest reading since October 2021, when CPI was 5%.

"The 0,9 of a percentage point drop in headline inflation between May and June is the largest decline since May 2020, when the rate also declined by 0,9 of a percentage point. Of the 12 main categories covered by the consumer price index, six saw a drop in annual inflation in June 2023, one remained unchanged and five recorded increases.

Annual goods inflation dropped to 6,3% in June from 8,0% in May. Services inflation was slightly lower at 4,5% in June compared with 4,6% in May.

He says the annual inflation for food and non-alcoholic beverages slowed to 11% from 14% in March.

"Most food and NAB components recorded lower inflation rates in June, with the exception of vegetables, fruit, and sugar, sweets & desserts. Annual inflation for sugar, sweets & desserts accelerated from 11,9% to 16,4%. This is the highest reading for this category since June 2017. Notable annual increases were recorded for brown sugar (up 17,4%), white sugar (up 17,1%) and chocolate slabs (up 16,2%).

"Prices for oils & fats decreased for the tenth successive month, with the index declining by 9,5% in the 12 months to June. The average price of a 750 ml bottle of sunflower oil was R35,57 in June 2023, lower than the R43,97 price tag in June 2022.

"The annual inflation rate for alcoholic beverages & tobacco increased to 6,1% from 5,9% in May. Wine inflation quickened to 9,4% from May’s reading of 9,1%. Beer inflation accelerated too, rising to 5,5% from 4,7%."

The significant drop in inflation could see the Reserve Bank’s Monetary Policy Committee holding the repo rate steady when it makes an announcement on Thursday.

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