Inflation has dropped 4.3% in July for the first time in five months after reaching an all-time high in two years in June.
Christelle Grobler, Standard Bank macro-economic analyst, said the inflation was lower than expected and might be temporary as diesel prices showed an increase in August, prompting a fuel increase in September.
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The lower consumer inflation was driven by lower fuel prices, lower food and non-alcoholic beverages (NAB) and municipal tariffs that have shown a slighter increase.
Fuel dropped 8.9% in July from 12.7% in June, which was spiked by the ongoing Middle East war, creating demand for oil while global oil prices were still high. Petrol decreased by 7.1% while diesel saw an 11.7% drop between June and July. The fuel annual rate is now at 20.6%.
“The fuel price decline from high levels in June was a major factor, but survey food inflation also came in lower in July. On the other hand, electricity and water tariff increases pushed housing inflation higher during the month,” explained Grobler.
Meat and cereal products have shown a further 2% decline after a 1.5% decline in June.
“Unprocessed beef products reflected negative annual price changes, with stewing beef at -7.9%, beef steak at -6.1% and beef mince at -5.8%. However, several processed meat products recorded an in crease including corned meat (+3.1%), macaroni (-0.7) and white bread (-0.6%),” reads the report.
Maize meal dropped 3.1%, macaroni dropped 0.7% and white bread. The inflation hike in food and NAB was pushed by fruits and nuts, cold beverages, and milk, among other things.
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In municipalities, electricity, water and refuse removal tariffs were also slightly increased compared to the previous year. Electricity was up 8.1% in 2026 compared to 10.4% in the previous year, with water at 10.2% and refuse removal at 4.7%.
“Overall, services inflation remained high but slowed slightly from 5.2% in June to 5% in July. The decline in headline CPI might be temporary, diesel prices once again increased in August, and we also expect a fuel price hike in September,” said Grobler.
- Inflation dropped by 4.3% in July, marking the first decrease in five months after a two-year high in June.
- Fuel prices fell significantly in July, with petrol decreasing by 7.1% and diesel by 11.7%, contributing to lower consumer inflation.
- Food prices declined, with meat and cereal products down by 2%, including stewing beef at -7.9% and maize meal at -3.1%.
- Municipal tariffs for electricity, water, and refuse removal increased slightly, with electricity rising 8.1% in 2026.
- Diesel prices increased again in August, leading to an expected fuel price hike in September, which may cause inflation to rise temporarily.
Inflation has dropped 4.3% in July for the first time in five months after reaching an all-time high in two years in June.
Christelle Grobler,
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Fuel dropped 8.9% in July from 12.7% in June, which was spiked by the ongoing
“
Meat and cereal products have shown a further 2% decline after a 1.5% decline in June.
“Unprocessed beef products reflected negative annual price changes, with stewing beef at -7.9%, beef steak at -6.1% and beef mince at -5.8%. However, several processed meat products recorded an in crease including corned meat (+3.1%), macaroni (-0.7) and white bread (-0.6%),” reads the report.
Maize meal dropped 3.1%, macaroni dropped 0.7% and white bread.
READ: Are we fighting inflation or killing growth?
In municipalities, electricity, water and refuse removal tariffs were also slightly increased compared to the previous year. Electricity was up 8.1% in 2026 compared to 10.4% in the previous year, with water at 10.2% and refuse removal at 4.7%.
“Overall, services inflation remained high but slowed slightly from 5.2% in June to 5% in July.
