South Africans feeling the pinch at the grocery store are not imagining price hikes.
“Bad news if you are a lover of cold drinks,” Statistics South Africa said as it released the latest consumer inflation numbers. The average price for bottled fizzy drinks climbed by 14.7% year-on-year and for cans by 14.1%.
And parents are paying 7% more for school books, newspapers and stationery than they did a year ago, the data shows. However, discounts on stationery prices from December saw a monthly price decrease of 1.1%. Exercise books, including exam pads, saw a decline of 15.4%.
The effect of the drought is now visible too.
Food and non-alcoholic beverages’ prices increased by 1.4% in January 2019 compared with December 2018, although the annual rate remained steady at 3%. Bread and cereal products climbed by 2.6% between December and January, the highest monthly increase since March 2016 when the impact of the drought was being felt.
For the braai masters out there the news was mixed, according to Stats SA. Year-on-year meat inflation dropped from 1.8% in December to 0.8% in January. However, meat prices went up by 1.2% month-on-month in January. There were month-on-month increases in sausages (1.9%), fresh chicken portions (1.4%) and beef steak (1.2%).
Vegetarians have had to pay more: Peppers, tomatoes, sweet potatoes and rooibos tea experienced the biggest annual price rises in January. The rise in rooibos tea prices was underpinned by a lack of supply as the industry continues to recover from a four-year drought, commented Stats SA.
Overall, Stats SA says consumer inflation dropped to 4% in January 2019 from 4,5% in December 2018.
“The drop in consumer inflation over the past few months is primarily the result of a series of cuts in the fuel price,” said Stats SA.
Fuel has a hefty share of 4.6% of the total consumer price index (CPI), which means that changes in the fuel price easily influence month-to-month changes in the headline figure.
“As motorists would have noticed, petrol prices are now lower than they were in April 2018. The petrol price (inland 95-octane) dropped by R1.23 per litre and diesel by R1.54 in January 2019. This resulted in a 10.2% monthly slump in the fuel index, the biggest monthly drop since January 2015.”
Fuel prices had a big impact on overall inflation in 2018. Stats SA prepared this graph comparing overall CPI inflation (blue line) with what CPI inflation would have been if the direct influence of fuel is removed (orange line).
“What the graph shows is that the rate of change in the prices for all goods and services, excluding fuel, remained somewhat stable in 2018. The major contributor to the rise in overall inflation that year was indeed the fuel price.”
Unfortunately, the Automobile Association has cautioned motorists to brace for a jump in the petrol price in March 2019, predicting an increase of at least 43 cents per litre..
SOURCE: TMG DIGITAL