Cape Town - Food price inflation, although moderating to 8.7% year-on-year in March from 10% year-on-year in February, was still the biggest driver of the annual consumer price inflation (CPI).
READ: Consumer inflation breather - for now
CPI eased to 6.1% in March 2017 – slightly lower from 6.3% in February 2017, Statistics SA announced on Wednesday.
NKC African Economics analyst Elize Kruger said it seems as if the food inflation cycle has not yet turned, as monthly declines were reported in only three of the nine food categories, namely bread and cereals, oils and fats and vegetables. These three categories represent 32% of the food basket.
Kruger said most other food categories’ prices are still higher compared to twelve months earlier.
Meat prices, which comprise 35.5% of the food basket, rose 9.9% y-o-y in March, after recording considerable increases in the previous four months. This increase still reflects the reduced supply following the drought experienced in 2015 and 2016.
The 1.7%-price increases in alcoholic beverages and tobacco in March reflected the annual increases in customs and excise duties, as announced in the National Budget delivered in February 2017.
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