Category: Inflation

Report by Monika Kristof

Executive summary

• The annual inflation rate for August  2021 increased to 3.4%  from 2.4% recorded for August 2020. See figure 1.
• The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, housing, water, electricity, gas and other fuels and health categories. See figure 2
• On a monthly basis the inflation rate declined by 0.6%. See figure 1
• The main drivers of the decline in the monthly inflation rate was observed in the transport category due to the decline in the cost of public transport services

Analysis

• Transport category recorded a huge  increase in the  annual inflation rate from (1.2%) to (6.2%). This was mainly influenced by high costs of operation of personal transport equipment and a slight increase in demand for vehicles
• The annual inflation rate for hotels, cafes, and restaurants increased  from (-0.9%) to (2.9%) due to the high demand for accommodation services at the back of the ease of Covid-19 restrictions
• The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-1.5%) to (1.6%) as a consequence of an increase in the costs of regular maintenance and repair of dwelling and an increase in the rental payments for dwelling both owners and renters
• The annual inflation rate for the health category increased from (2.8%) to (3.5%)  due to an increase in the demand for outpatient, medical, dental and paramedical services due to covid-19
• The annual inflation rate for the clothing and footwear category increased from (-5.1%) to (-2.7%). This was a result of a high demand for clothing and footwear

Outlook

• We project that the annual inflation rate for September 2021 will remain within the 3 and 4% range. The transport and food categories will remain elevated due to high cost-push factors

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

By Monika Kristof

Executive summary

• The annual inflation rate for July  2021 increased to 4.0% up  from 2.1% recorded for July 2020. See Figure 1
• The main drivers of an increase in the annual inflation rate were transport, furnishings, household equipment and routine maintenance of the houses, housing, water ,electricity, gas and other fuels and clothing and footwear. See figure 2
• The category of clothing and footwear  recorded a deflation for July 2021

Analysis

• Transport category recorded a huge  increase in the  annual inflation rate from (-1.2%) to (10.6%), this was mainly influenced by high costs of operation of personal transport equipment and a high input cost for vehicles
• Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.3%) to (5.8%), this was influenced by an increase in the prices of  household textiles, carpets and other floor coverings and glassware, tableware and household utensils
• The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-1.5%) to (1.2%), this was due to an increase in the costs of regular maintenance and repair of dwellings
• The  annual inflation rate for  the clothing and footwear category declined  from (-4.3%) to (-3.0%), this was influenced by an upturn in demand for clothing and footwear
• The annual inflation rate for hotels, cafes, and restaurants increased  from (0.8%) to (1.1%), this was due to the ease of Covid-19 restrictions
• The annual inflation rate for recreation and culture declined from (6.5%) to (2.1%), this was influenced by high prices of  audio-visual, photographic and data processing equipment including repairs and a lack of demand for holiday packages

Outlook

• We project that the annual inflation rate  for August 2021 will increase due to high cost-push factors with added pressure on the supply side by the vaccine roll-out. In particular, prices for vehicle related input,  personal transport equipment and food products will remain elevated for the time being as supply chains (both domestically and abroad) converge back to pre-pandemic conditions

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

                    

Report by Monika Kristof

Executive summary

• The annual inflation rate for June 2021 shot up to 4.1% up  from 2.1 % recorded for June    2020. See Figure 1.
• The main drivers of an increase in the annual inflation rate were transport, furnishings, household equipment and routine maintenance of the house ,food and non-alcoholic beverages, housing, water ,electricity, gas and other fuels and miscellaneous good and services. See figure 2
• The category of clothing and footwear  recorded a deflation for June 2021 which is an indication of huge pressure on the retail industry.

Analysis

• Transport category recorded a huge  increase in the  annual inflation rate from (-0.8%) to (9.6%), this was mainly influenced by high costs of operation of personal transport equipment and a cost push increase for vehicles due to supply disruptions.
• Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.8%) to (5.6%), this was influenced by an increase in the prices of  household textiles, carpets and other floor coverings.
• Food and non-alcoholic beverages annual inflation rate increased from (4.7%) to (7.3%), this was influenced by an increase the prices of meat, oils and fats due to cost push inflation.
• The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-0.6%) to (1.3%), this was due to an increase in the costs of regular maintenance and repair of dwelling.
• The annual inflation rate for miscellaneous goods and services increased from (6.3%) to (6.4), this was influenced by the high demand for financial services.
• The annual inflation rate for hotels, cafes, and restaurants declined from (0.9%) to (0.4%), this was due to a lack of demand for accommodation services and Covid-19 restrictions.

Outlook

• We anticipate an increase in the annual inflation rate for July 2021, due to the heightened supply chain disruptions which will be imported by our biggest trading partner, South Africa.

Figure1: Annual inflation rate  

Figure 2: Categorical analysis Year on Year %

Executive summary

• The annual inflation rate for May 2021 increased  to 3.8% from 2.1 % recorded for May 2020. See Figure 1.
• The main drivers of an increase in the annual inflation rate were transport, food and non-alcoholic beverages, housing, water ,electricity, gas and other fuels, alcoholic beverages and tobacco, furnishings  household equipment and routine  maintenance of the house, health and miscellaneous good and services. See figure 2
• The category of clothing and footwear  recorded a deflation for the 12-month period between May 2020 and May 2021.

Analysis

• Transport category recorded an increase in the  annual inflation rate from (-0.1%) to (7.3%), this was mainly influenced by high cost of operation of personal transport equipment and  high demand for vehicles
• Food and non-alcoholic beverages annual inflation rate increased from (4.7%) to (6.6%),this was influenced by the rise in food and  meat prices.
• The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-0.6%) to (1.3%),this was due to an increase in the costs of regular maintenance and repair of dwelling.
• Alcoholic beverages and tobacco recorded an increase in the annual inflation rate  from (2.2%) to (3.5%),this was influenced by the high demand for  tobacco and alcoholic beverages
• Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (3.7%) to (4.5%) ,this was influenced by an increase in the prices of  carpets and other floor coverings and household textiles
• The  annual inflation rate for  the health category increased   from (3.0%) to (3.7%),this is due to an increase in demand for health services and medical equipment due to Covid 19
• The annual inflation rate for hotels, cafes, and restaurants declined from (0.8.%) to (0.5%), this was due to a lack of demand for accommodation services.

Outlook

• We anticipate the annual inflation rate for June 2021 to hover below 4% as demand remains subdued due to the divergent recoveries in the respective economies.

Figure 1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for April  2021 increased to 3.9% from 3.1% recorded for the previous month. See Figure 1.
• On a 12 months period April 2021 recorded the highest annual inflation rate.
• The main drivers of the increase in the annual inflation rate were ,transport, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, housing, water ,electricity, gas and other fuels, communications and food and non-alcoholic beverages categories .See figure 2
• The hotels and cafes inflation remain in negative territory .

Analysis

• Transport inflation recorded a huge increase from (-0.1%) to (7.5%), this was mainly influenced by second effects of fuel prices.
• Alcoholic beverages and tobacco recorded an increase in the annual inflation rate  from (0.4%) to (4.2%),this was influenced by the high prices of  tobacco.
• Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.2%) to (5.3%) ,this was influenced by an increase in the prices of  carpets and other floor coverings.
• The communications inflation increased from (1.5%) to (3.1%),this is due to continuous demand for data and voice services.
• Food and non-alcoholic beverages inflation increased from (4.2%) to (5.9%),due the rise in meat prices.
• The annual inflation rate for hotels ,cafes and restaurants declined from (1.7% ) to ( -0.2%),as this sector remain under pressure.(see figure 2).

Outlook

• The sudden surge in the annual inflation rate will alert Central Banks and their subsequent monetary policy decisions.
• The increase in the annual inflation rate is driven primarily by  cost-push factors with added pressure on the supply side by the vaccine roll-out.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for March  2021 increased to 3.1% from 2.4% recorded for March 2020 (See Figure 1).
• March 2021 recorded the highest annual inflation rate on a 12-month period.
• The main drivers of an increase in the annual inflation rate were, food and non-alcoholic beverages, communications, alcoholic beverages and tobacco, housing, water, electricity, gas and other fuels and furnishings (See figure 2).
• The category of clothing and footwear and hotels, cafes and restaurants recorded  a deflation for two consecutive months.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.9%) to (6.6%), this was mainly influenced by high demand for food and an increase in  meat prices especially beef due to supply constraints.
• The annual inflation rate for communications increased from (1.1%) to (3.3%),this was influenced by the high demand for communication services due to the continuing remote working condition.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.0%) to (3.8.%), this was influenced by an increase in sin taxes imposed  by the ministry of finance.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-0.3%) to (1.1%),this was due to an increase in the costs of regular maintenance and repair of dwelling.
• The annual inflation rate for hotels, cafes, and restaurants declined from (2.1%) to (-0.2%), this was due by the lack of demand for accommodation services.
• The education category recorded a decrease in the annual inflation rate from (7.6.%) to (0.8%), this was influenced by the decline in the  price levels  of primary (private) and secondary education (ages 7 to 17 years).

Outlook

• Food and non-alcoholic beverages ,housing ,water electricity, gas and other fuels and communications categories  will continue to drive up inflation in the second quarter of 2021.
• We anticipate that the annual inflation rate for April 2021 will increase  but trend around 3 %.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for February 2021 stood  at 2.7% up from 2.5% as recorded in February 2020.see Figure 1.
• February 2021 recorded the same annual inflation rate as  January 2021.
• An increase in the annual inflation rate between February  2020 and February  2021 emanated mainly from the categories of Food and non-alcoholic beverages, alcoholic beverages and tobacco, housing ,water electricity gas and other fuels  and communications and health category. See figure 2   
• The category of clothing and footwear and hotels, cafes and restaurants recorded a deflation for February  2021.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.8%) to (5.5%) this was mainly influenced by high demand for meat and oils and fats.
• The annual inflation rate for communications increased from (1.4%) to (3.1%), this was influenced by the high demand for communication services due to the continuing remote working condition.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.7%) to (4.2%),this was influenced by an increase in demand for tobacco.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-0.5%) to (1.5 %) and  was driven by an increase in the uptake of rental dwellings.
• The annual inflation rate for hotels, cafes, and restaurants declined from (2.7%) to (-0.8%), this was due by the lack of demand for accommodation services.
• Transport category recorded a decline in the annual inflation rate from (4.4%) to (0.2%).
• The education category recorded a decrease in the annual inflation rate from (7.6.%) to (0.8%) on the back of  this was influenced by the decrease in the  price levels of  primary (private) and secondary education (ages 7 to 17 years).

Outlook

• Food and non-alcoholic beverages ,housing ,water electricity, gas and other fuels and communications categories  will continue to be the main drivers of inflation  in the coming months.
• We anticipate that the annual inflation rate for March 2021 will  pick up but it will hover below 3%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for January 2021 stood at (2.7%) up from (2.4%) that was recorded for December 2020.See Figure 1.
• On a monthly basis the monthly inflation rate rose to 0.9% in January 2021 from 0.0 % recorded for the previous month.
• The slight increase in the annual inflation rate between January 2020 and January 2021 emanated mainly from the categories of communications, food and non-alcoholic beverages, alcoholic beverages and tobacco and furnishing, household equipment and routine maintenance of the house. See figure 2   
• The category of clothing and footwear and transport recorded a deflation for January 2021.

Analysis

• The annual inflation rate for food and non-alcoholic beverages increased from (2.2%) to (5.2%) this was mainly influenced by high demand for meat and oils and fats.
• The annual inflation rate for communications increased from (0.7%) to (4.1%), this was influenced by the high demand for communication services due to COVID-19 19 restrictions.
• Alcoholic beverages and tobacco annual inflation rate increased from (2.6%) to (5.0%), this was influenced by the high prices reflected in the category of tobacco.
• The annual inflation rate for housing water, electricity, gas and other fuels increased from (-1.2%) to (1.0 %) this was influenced by an increase in the prices of rental payments for dwelling (both owners and renters) and in the electricity, gas and other fuels prices.
• The annual inflation rate for furnishings, household equipment and routine maintenance of the house increased   from (2.9%) to (4.1%) this was influenced by the price levels of carpets and other floor coverings, glassware, tableware and household utensils.
• The annual inflation rate for hotels, cafes, and restaurants declined from (4.1%) to (0.1%), this was influenced by the lack of demand for Accommodation services.
• Transport category recorded a depressing decline in the annual inflation rate from (5.0%) to (-0.9%), this was due to the lack of demand for car parts.
• The education category recorded a decrease in the annual inflation rate from (5.7%) to (1.8%) this was influenced by the price levels of pre-primary education (ages 2 to 6 years) and tertiary education.

Outlook

• We project that the annual inflation rate for February 2021 will increase but it will remain within the South Africa inflation target of 3% and 6%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %

Report by Monika Kristof

Executive summary

• The annual inflation rate for November 2020 declined to 2.2% from 2.5 % that was recorded for November 2019.See figure 1.
• The decline in the annual inflation rate between November 2019 and November 2020 resulted mainly from decreases reflected in the price levels of clothing and footwear, housing, water, electricity, gas and other fuels, transport, education, hotels, cafes, and restaurants categories.
• The categories of food and non-alcoholic beverages, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, communications, miscellaneous goods, and services recorded an increase in the annual inflation rate between November 2019 and November 2020.See figure 2.

Analysis

• The decline in the annual inflation rate for clothing and footwear from (1.9% to -6.5 %) was influenced by the decline in the prices of men’s clothing and adult footwear.
• Housing, electricity water, gas and other fuels recorded a decline in the annual inflation rate from (1.9% to -1.3%), this was influenced by the price levels of rental payments for dwelling (both owners and renters), regular maintenance and repair of dwelling and water supply, sewerage service and refuse collection.
• The decline in the annual inflation rate for the transport category from (0.1% to -1.2%) was influenced by the decline in the prices of operation of personal transport equipment and the lack of demand for public transportation services.
• The decline in the annual inflation rate for the education category from (12.0% to 7.0%) was influenced by the decline in the prices of   pre-primary education (ages 2 to 6 years), primary (private) and secondary education (ages 7 to 17 years) and tertiary education category.
• The decline in the annual inflation rate for hotels, cafes, and restaurants category from (3.5% to 0.9%), was influenced by the lack of consumer confidence which led to a lower demand for accommodation services.

Outlook

• December is a holiday season and people tend spend more, this will result in an increase in the overall demand for goods and services, consequently this will increase the overall annual inflation rate. We project that the annual Inflation rate for December 2020, will rise but remain around 2 and 2.5 %.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year Percentage

Report by Monika Kristof

Executive summary

• The annual inflation rate for December 2020 slowed down to 2.4% from 2.6% that was recorded for December 2019.See Figure 1.
• On average, the annual inflation rate for 2020 stood at 2.2%.
• The deceleration in the annual inflation between December 2019 and December 2020 emanated mainly from the categories of clothing and footwear, housing, water, electricity, gas and other fuels, hotels, cafes and restaurants, transport, education and recreation and culture categories. See figure 2.
• The category of clothing and footwear and housing, water, electricity, gas, and other fuels recorded a deflation throughout the year 2020.
• Despite the slowdown in the annual inflation rate, food and non-alcoholic beverages, alcoholic beverages and tobacco, communications, furnishings, household equipment and routine maintenance of the house and miscellaneous goods and services categories recorded an increase in the annual inflation rate. See figure 2.

Analysis

• The deflation recorded for the clothing and footwear category from (0.5 % to -6.0 %) was mainly influenced by the lack of demand for footwear.
• The decline in the annual inflation rate for the housing, water electricity gas and other fuels category from (1.9% to -1.3 %) was influenced by the decrease in the prices of rental payments for dwelling (both owners and renters), and   in the prices of regular maintenance and repair of dwelling.
• The annual inflation rate for hotels, cafes, and restaurants declined from (4.1% to 0.1%), this was influenced by the lack of demand for Accommodation services.
• Transport category recorded a decline in the annual inflation rate from (2.0% to -1.3%), the slowdown was mainly influenced by the decline in the prices of car parts for personal transport and by the lack of demand for public transportation services.
• The decline in the annual inflation rate for the education category from (12.0% to 7.0%) was mainly due to price declines in the pre-primary education (ages 2 to 6 years) and tertiary education categories.

Outlook

• As the Covid-19 second wave hits, the stagnation in economic activities is expected to continue and the loss of incomes due to retrenchments and the closure of some businesses will lead to a lack of demand for goods and services and consequently cause a decline in the inflation rate.
• We project that the annual inflation rate for 2021 will remain within the South Africa inflation target of 3% and 6%.

Figure1: Annual inflation rate

Figure 2: Categorical analysis Year on Year %