South Africa’s annual inflation rate rose to 4.4 percent in August from 4.3 percent in July, reversing its first decline in five months, although the increase was smaller than economists had expected.
Data from Statistics South Africa showed on Wednesday that headline inflation came in below the 4.5 percent forecast. On a monthly basis, consumer prices were unchanged in August after rising 0.2 percent in July.
Transport remained the biggest source of upward pressure, with prices rising 8.8 percent year on year in August, only slightly slower than the 8.9 percent increase recorded in July. Petrol prices fell 2 percent between July and August, while diesel prices increased 3.1 percent.
Food inflation also picked up, rising to 1.1 percent from 0.9 percent in July. The increase marked the first acceleration in food price inflation in nine months.
The rise in headline inflation was partly offset by a moderation in underlying price pressures. Core inflation, which excludes food, non alcoholic beverages, fuel and energy, eased to 4.1 percent in August from 4.2 percent in July, when it reached a two year high.
The core reading was also slightly below the 4.2 percent economists had expected.
Housing and utilities remain the largest component of South Africa’s consumer price index, accounting for about 23 percent of the basket, followed by food and non alcoholic beverages at 19 percent and transport at 15 percent.
The August figures come as the South African Reserve Bank weighs its next interest rate decision, with inflation remaining above the central bank’s 3% target.
The modest increase in headline inflation, combined with the easing in core inflation, gives a mixed picture of price pressures as policymakers assess whether higher energy and transport costs could keep inflation elevated.
For households, transport and food prices remain key areas to watch, given their importance in consumer spending and the latest increase in both categories.