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SA’s CPI rises to 4.4% y/y in April
South Africa's Annual Consumer Price Inflation for April has come in at 4.4 per cent, that's up from 3.2 per cent in March. Stats SA says on a month on Month Basis, the CPI was unchanged at 0.7 per cent in April, the same as the previous month. Patrick Kelly, Chief Director at Stats SA joins CNBC Africa for more.
Wed, 19 May 2021 11:10:11 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Fuel costs and food price inflation were identified as the primary drivers behind the higher than expected CPI numbers.
- Provincial variations in inflation rates are influenced by consumption patterns, with provinces like Gauteng and the Western Cape having a significant impact on the national inflation picture.
- Global demand for plant-based oil products, fluctuations in oil prices and exchange rates, and the potential pass-through of cost pressures to consumers are key factors shaping the future inflation outlook.
South Africa's Annual Consumer Price Inflation for April has come in at 4.4 per cent, up from 3.2 per cent in March, according to the latest data released by Stats SA. The Chief Director at Stats SA, Patrick Kelly, joined CNBC Africa to discuss the unexpected rise in inflation and the key factors driving this increase. Kelly highlighted that fuel costs and food price inflation were the main drivers behind the higher than expected CPI numbers.
The unexpected hike in fuel costs, combined with soaring food prices, particularly in categories such as meat, dairy products, and oils, has pushed the inflation rate to multi-year highs. These essential items, which are purchased more frequently by consumers, have seen significant price increases. On the other hand, items like housing rents and education fees, which are infrequently adjusted, have remained subdued.
Despite the stable month-on-month figure of 0.7 per cent, Kelly warned that the current inflation trajectory could potentially breach the upper limit set by the Reserve Bank. With an average inflation rate of 4.4 per cent, the monthly increases indicate a persistent upward trend in prices.
Looking ahead, Kelly discussed the factors that could further impact the inflation outlook for the second half of the year. He mentioned the global demand for plant-based oil products, affecting food prices, as a significant driver of inflation. Additionally, fluctuations in the oil price and exchange rates, particularly the dollar, are expected to influence future inflation numbers.
Kelly also addressed the potential impact of provincial inflation variations on the national inflation picture. Due to the COVID-19 pandemic, price observations are currently pooled nationally, leading to differences in provincial inflation rates based on consumption patterns. However, Kelly stressed that provinces with higher weights in the CPI basket, such as Gauteng and the Western Cape, could have a more substantial impact on the overall national inflation rate.
As food producers grapple with surging commodity prices, there are concerns about passing on these cost pressures to consumers. While soft commodities like sunflower seeds are at all-time highs, Kelly emphasized the importance of monitoring price increases in essential goods that could impact households across South Africa.
In conclusion, the unexpected rise in South Africa's inflation rate underscores the challenges facing consumers and businesses in the current economic environment. As global and domestic factors continue to influence price dynamics, policymakers and economists will need to closely monitor inflation trends to ensure economic stability and sustainable growth.
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