South Africa’s consumer price inflation (CPI) raced to 7.4% in June from 6.9% in May, show Statistics SA figures that were released on Wednesday.
This is the highest rate recorded since May 2009 when the rate was at 8%. “The consumer price index increased by 1.1% month on month in June 2022,” said Stats SA.
According to Stats SA, the main contributors to the 7.4% annual inflation rate were food and non-alcoholic beverages, housing and utilities, transport, as well as miscellaneous goods and services.
It said food and non-alcoholic beverages increased by 8.6% year on year and contributed 1.5 percentage points to the total CPI annual rate of 7.4%, while housing and utilities increased by 5.1% year on year and contributed 1.2 percentage points.
“Transport increased by 20% year on year and contributed 2.7 percentage points. Miscellaneous goods and services increased by 4% year on year and contributed 0.6 of a percentage point. In June, the annual inflation rate for goods was 11%, up from 9.5% in May. For services it was 3.9%, up from 3.6% in May,” shows the report.
In June, the agency pointed to the effect of rising fuel prices. Although fuel was a major contributor to the annual rate, transport, food, and non-alcoholic beverages also contributed greatly.
The CPI report showed that the inflation rate fell to 5.1% from 6.5% if the impact of fuel is removed.
Diesel took up most of the annual rate pie, amounting to 45% since the prices increased by 8.1% between April and May, while petrol prices accounted for 0.7% in the same period.
“The average price of a litre of diesel in May 2021 was R16.20, meaning it cost R729 to fill a 45-litre tank. Twelve months later, with the average price at R23.67 per litre, filling the same tank costs R1 065,” said Stats SA in its report at the time.
“Petrol prices moderated between April and May, edging lower by 0.7%. Despite this decline, petrol is almost 27% more expensive than it was in May 2021.”
Meanwhile, President Cyril Ramaphosa on Tuesday welcomed the European Union (EU) Council president Charles Michel’s pledge that commits the EU to support Africa’s efforts to achieve food security.
The Presidency said the pledge would help decrease Africa’s independence on agricultural inputs that are exported from elsewhere in the world.
Said the Presidency: “In this regard, a joint project plan was agreed to assist Africa in developing its own fertiliser production capacity. The commitment follows positive reception to President Ramaphosa’s proposal to the G7 countries at the recent G7 Summit hosted in Germany, that Africa is enabled to invest in developing its fertiliser to deal with food insecurity.”
Ramaphosa hosted Michel at his official Mahlambandlopfu residence on Tuesday. The bilateral meeting was centred around cementing South Africa and EU strategic partnership. It also discussed key trade and peace and security issues.
Bilateral trade
The South Africa-European Union Strategic Partnership functions within the framework of the Trade, Development and Cooperation Agreement (TDCA), which was ratified in 2004.
The Presidency said the EU is South Africa’s largest trading partner as a bloc. “Since the adoption of the Trade, Development and Co-operation Agreement, total trade increased from R150-billion in 2000 to R843-billion in 2021.
“Exports to the EU increased steadily over the years, growing from R64-billion back in 2000 to R482-billion in 2021. During the same period, imports from the EU also increased from R86-billion in 2000 to R361-billion in 2021.”
Ramaphosa also welcomed the reflection on strengthening and growing existing bilateral trade ties and the commitment to resolve current and urgent trade matters particularly on the export of citrus products from South Africa to the EU.
“President Ramaphosa supported the process of further discussions to be held at ministerial level to work out a solution that will allow for sustained trade in the citrus sub-sector,” the Presidency said.
Peace and Security
On peace and security, the Presidency said Ramaphosa was encouraged by the expression of EU support to the Southern African Development Community (SADC) efforts in stabilising the security situation in Mozambique.
“South Africa, the EU and the SADC share a common obligation in ensuring lasting peace and stability in the region and the rest of Africa,” it said.
The president further applauded the positive development of the EU-Africa partnership, which continues to flourish following the AU-EU Summit held in February in Brussels.
“The close ties have facilitated more open and practical engagements on various trade, political and peace and security matters.”
Additional information from SAnews.gov.za
Also read: SA’s consumer price inflation races to five-year high
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