September saw a slight decline in inflation in South Africa, marking the fourth consecutive month of decline, according to data revealed by Statistics South Africa. Indeed, the annual inflation rate fell to 3.8%, from 4.4% last August, reaching its lowest level since April 2021.
The Consumer Price Index increased by 0.1% compared to the previous month in September. The main positive contributors to the annual inflation rate of 3.8% were increases in the housing and utilities (4.8%), miscellaneous goods and services (6.9%), food and non-alcoholic beverages (4.7%) and alcoholic beverages and tobacco (4.7%) sectors. Only the transport sector recorded a negative contribution of 1.1%.
Economists had expected an annual inflation rate of 4.1%, highlighting in particular increases in international food prices. Investec economist Lara Hodes says the sharp rise in international food prices in September will put pressure on local food inflation, as South Africa often relies on international prices for its food.
A significant drop in petrol prices in September had a dampening effect on inflation for the month, but fuel prices are expected to rise in November, economist Annabel Bishop says. This is mainly due to geopolitical tensions that have led to higher global oil prices.
In September, the annual inflation rate for goods stood at 3.3%, down from 4.4% in August 2024, while the annual inflation rate for services stood at 4.4%, down from 4.5% in August 2024, according to Statistics South Africa.
Thus, South Africa’s inflation fluctuations demonstrate the complexity of economic and international factors that influence the country’s financial indicators. Consumers should stay attentive to price changes and economic trends to better anticipate market fluctuations and adjust their budgets accordingly.