South Africa annual consumer inflation rises to 4% y/y in December

South Africa annual consumer inflation rises to 4% y/y in December
JOHANNESBURG - South Africa’s headline consumer price inflation quickened to 4.0% year-on-year in December, from 3.6% in November, data from Statistics South Africa showed on Wednesday.

On a month-on-month basis, price growth was 0.3% in December, versus 0.1% in the previous month.

Core inflation, which excludes prices of food, non-alcoholic beverages, petrol and energy, fell to 3.8% year-on-year in December compared with 3.9% in November, while on a month-on-month basis it was at 0.2%, from 0.1% in the prior month. 

According to Kamilla Kaplan from Investec, fuel price inflation will continue to elevate headline CPI inflation in Q1.20, in view of the low statistical base established in the corresponding period of 2019.

Kaplan said, "The other key influence on the CPI outcome in December was the increase in the contribution from the food and non-alcoholic beverages.  December was also a measurement month for rentals which registered slower rates of growth, translating to a lower contribution from the housing and utilities component.   The softening in rental inflation also impacted on core inflation that decelerated to 3.8% y/y from 3.9% y/y previously. Core inflation was also slower in 2019 as a whole at 4.1% y/y than in the recent years (4.3% y/y in 2018 and 4.7% y/y in 2017) which is broadly reflective of a weak demand environment that limits pricing power in the economy."