Inflation Cools and Interest Rate Cut coming
Consumer price inflation fell from 5.1% in June to 4.6% in July. This is the lowest rate since July 2021. It is also very close to the South African Reserve Bank's target of 4.5%.
This paves the way for an interest rate cut in September.
Cheaper fuel in July reduced transportation expenses.
Additionally, the cost of food and non-alcoholic drinks continued to decelerate to 4.5% in July, down from 4.6% in June.
The rate of food inflation has significantly decelerated from its peak of 9% in November of the previous year and is now at its lowest point since the peak of the pandemic in September 2020.
In July, meat prices were 0.4% lower than in June and 1% higher than last year. Statistics show that meat makes up over a third of what households spend on food.
Bread, cake flour, and pasta are cheaper than last year. However, rice is up 21%, pizza and pies are up 12%, and samp is up 7%. Instant coffee has increased by 22%, black tea by 16%, and ground coffee and beans by 15%. Rooibos tea is also 11% more expensive than in July 2023.
In July, prices went up in many places, but not as much as last year. Prices increased in July, but not as much as the previous year. Electricity costs rose by 12.1%, water costs by 7.5%, and property taxes by 10.7%. These increases were lower than the ones seen in 2023. Last year, electricity costs went up by 15.3%, water costs by 9.6%, and property taxes by 8.4%.
Statistics SA says that water tariffs increased by 9.9% annually. Electricity tariffs went up by 9.5% and property rates by 6.6% in the past year.
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