Consumer price inflation continue to accelerate

Economic data released this week shows that the consumer price inflation accelerated to 3.2% in July from 2.2% in June.

The Producer Price Index (PPI) also increased from 1.4% in June to 2.4% in July.

The PPI measures the average changes in prices manufacturers sell their goods to wholesalers.

Data released by Statistic South Africa showed that the consumer price inflation remained well within the Reserve Bank’s target band.

Food and non-alcoholic beverages increased by 4.3% year-on-year and contributed 0.7% of points to the annual inflation rate.

The up-tick is also attributed to an increase in fuel prices, municipal rates and taxes and utilities which continue to record stable but high rates of inflation in July.

Economists say there are no inflation pressures going forward because of the significant job losses and companies struggling to stay afloat.

The main contributor to the headline PPI monthly increase was linked to petroleum, chemical, rubber and plastic products.

They all increased by 4.8% on a month-on-month basis and contributed 1.0% points to the total PPI.