Annual headline inflation cooled to 5,4% in June from 6,3% in May, sinking below the upper limit of the South African Reserve Bank’s monetary policy target range. The last time inflation was below 6% was in April 2022. The rate in June is the lowest reading in 20 months (since October 2021) when the rate was 5,0%.

The 0,9 of a percentage point drop in headline inflation between May and June is the largest decline since May 2020, when the rate also declined by 0,9 of a percentage point. Of the 12 main categories covered by the consumer price index (CPI), six saw a drop in annual inflation in June 2023, one remained unchanged and five recorded increases. Annual goods inflation dropped to 6,3% in June from 8,0% in May. Services inflation was slightly lower at 4,5% in June compared with 4,6% in May.

Vegetables, fruit, and sugar, sweets & desserts buck the trend

Annual inflation for food and non-alcoholic beverages (NAB) slowed for the third successive month, cooling to 11,0% from a high of 14,0% in March. Most food and NAB components recorded lower inflation rates in June, with the exception of vegetables, fruit, and sugar, sweets & desserts. Annual inflation for sugar, sweets & desserts accelerated from 11,9% to 16,4%. This is the highest reading for this category since June 2017. Notable annual increases were recorded for brown sugar (up 17,4%), white sugar (up 17,1%) and chocolate slabs (up 16,2%).

Prices for oils & fats decreased for the tenth successive month, with the index declining by 9,5% in the 12 months to June. The average price of a 750 ml bottle of sunflower oil was R35,57 in June 2023, lower than the R43,97 price tag in June 2022.

The annual inflation rate for alcoholic beverages & tobacco increased to 6,1% from 5,9% in May. Wine inflation quickened to 9,4% from May’s reading of 9,1%. Beer inflation accelerated too, rising to 5,5% from 4,7%.

Other notable price changes in June

Annual transport inflation tumbled from 7,0% in May to 1,8% in June, dragged lower mainly by softer fuel prices. The fuel index declined by 8,3% in June 2023 compared with June 2022. The monthly change was -3,1%.

The CPI in June incorporates the most recent quarterly survey of housing rents. Actual rents recorded an annual increase of 2,7%, slightly higher than March’s print of 2,5%. The annual rate for imputed rents was 2,9%, up from 2,7% in March. On a quarter-on-quarter basis, imputed rents increased by 1,2% between March 2023 and June 2023. This is the largest quarterly increase since September 2018, when the rate was also 1,2%.

The graphs below show the products that recorded notable price increases in June.

For more information, download the June 2023 CPI statistical release and Excel files with indices and average prices here. The archive is available here.

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