BUSINESS NEWS - Statistics SA on Wednesday announced the annual consumer price index (CPI) increased by 0.7% in March to 3.2% from 2.9% in February, paving the way for a substantial increase in inflation.
For a country already reeling from a rand under fire, economist Mike Schussler was very concerned.
“In April last year, we had a low inflation and this year we are going to have a bit of a hike since petrol went up and we also had a 15.6% electricity hike.
“The CPI for March came as expected but we will find that inflation is going to increase a lot in April and again in July.”
Statistics SA reported the core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, had reduced to 2.5%, the lowest level since at least 2009.
“Annual inflation for food and non-alcoholic beverages edged up to 5.7% in March from 5.2% in February,” the report stated.
“Products which recorded annual price rises above the 5.7% average included oils and fats, sugar, sweets and desserts, milk, eggs and cheese, fish and meat.”
Housing and utilities increased 2.2% and contributed 0.5%, with recreation and culture recording 1.8%, household contents and services 0.7%, clothing and footwear 0.3%, restaurants and hotels 0.1% and communication -0.5%.
“Oils and fat products continue to see large price increases, with an annual rise of 13.4% recorded in March, up from 10.6% in February,” said the report.
The rate in March was the highest since October 2016, as prices climbed across the board in this group, with the largest increases recorded by cooking oil (16.3%), peanut butter (12.4%) and margarine (10%).
However, Statistics SA said education inflation was at its lowest annual rate in three decades.
“Fees increased by 4.1% … the lowest increase since at least 1991.”