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Consumer inflation rose in June to 5% from 4,6% in May, with food being the main driver. The SA Reserve Bank’s Monetary Policy Committee’s statement after its meeting on 21 June said its inflation forecast had shown a slight near-term deterioration since its previous meeting.
INTERNATIONAL FOOD PRICES RISE According to the Food and Agricultural Organisation’s food price index, international food prices were up 1% month-on-month in June, halting their three-month falling trend. Sugar prices, which surged over the month, were mainly behind the increase. Although the index remains below its all-time peak reached in February 2011, it was 39% higher than its level a year ago.
CORE INFLATION INCREASES Citigroup’s preferred core rate of inflation – excluding food, petrol and electricity – is much lower than the headline rate of 5% but still up 0,5 percentage points above its cyclical trough. But the pick-up gathered some speed in June, as last year’s unusually low price increases in many sectors gradually dropped out of the year-on-year comparison in the consumer price index.
COMPONENTS SHARPLY HIGHER In June, petrol price inflation accelerated to above 21% year-on-year. However, the increase in the transport component of the consumer price index is lower, dragged down by cars. In the food sector there were also some unfavourable base effects contributing to the pick-up, as prices had declined 0,4% month-on-month in June last year.
GOING HIGHER Inflation reached 5% – as expected – in June, from a trough of 3,2% in September last year. The main contributions to the inflation outcome came from the food, housing and utilities and transport categories, which together accounted for 3,6 percentage points of the 5% outcome in June. Food price inflation continued its marked upward trend, measuring 7,3% in June from 6,3% in May.
INTERNATIONAL FOOD PRICES RISE According to the Food and Agricultural Organisation’s food price index, international food prices were up 1% month-on-month in June, halting their three-month falling trend. Sugar prices, which surged over the month, were mainly behind the increase. Although the index remains below its all-time peak reached in February 2011, it was 39% higher than its level a year ago.
CORE INFLATION INCREASES Citigroup’s preferred core rate of inflation – excluding food, petrol and electricity – is much lower than the headline rate of 5% but still up 0,5 percentage points above its cyclical trough. But the pick-up gathered some speed in June, as last year’s unusually low price increases in many sectors gradually dropped out of the year-on-year comparison in the consumer price index.
COMPONENTS SHARPLY HIGHER In June, petrol price inflation accelerated to above 21% year-on-year. However, the increase in the transport component of the consumer price index is lower, dragged down by cars. In the food sector there were also some unfavourable base effects contributing to the pick-up, as prices had declined 0,4% month-on-month in June last year.
GOING HIGHER Inflation reached 5% – as expected – in June, from a trough of 3,2% in September last year. The main contributions to the inflation outcome came from the food, housing and utilities and transport categories, which together accounted for 3,6 percentage points of the 5% outcome in June. Food price inflation continued its marked upward trend, measuring 7,3% in June from 6,3% in May.
