Economists and the industry have continued to react positively after Stats SA announced on Wednesday that December's consumer price inflation rate rose from 2.9% in November 2024 to 3.0% in December 2024.
Waldo Krugell, an economics professor at North-West University, said that December's CPI rose from 2.9% in November to 3.0% in December. “I don't think it will have a big influence on next week's repo rate decision. If you look more closely, a 4.4% increase in the prices of housing and utilities contributed to the slight increase in the average rate. Actual rent rose by 2.8% in the fourth quarter. Alcoholic drinks and tobacco prices rose by 4.3%. The prices of food and non-alcoholic beverages rose by just 2.5%.”
Krugell added that hot drinks are a different story - instant coffee, black tea and drinking chocolate were quite a bit more expensive. ‘’Year-on-year, the fuel price was lower and this helped a lot to keep the inflation rate low. Services inflation was slightly lower at 4.2% and the core inflation rate stood at 3.6%. The average inflation rate for 2024 was 4.4%, significantly lower than 2023's 6%. All in all, the inflation rate is safely at the bottom of the Reserve Bank's target band and there are no clear signs that inflation is on the rise again.”
John Hudson, head of agriculture at Nedbank Commercial Banking, said that after slowing to 1.6% in November 2024, food inflation picked up marginally to 1.7% in December. “The good news for consumers is that food price inflation averaged 4.1% in 2024 which is a far cry from the 11.0% recorded in 2023. We must bear in mind that food prices in the latter part of 2023 escalated due to factors such as load shedding and avian influenza, which impacted production and resulted in higher food inflation. In 2024, however, production was more stable and with improved production and supply, food inflation has come off nicely year-on-year, albeit off a high base.”
Hudson added that the forward-looking picture for food inflation into 2025 is complicated with a fair degree of local and global uncertainty at play. “This points to upside pressure on food inflation in 2025 with food prices picking up from the low levels we’re seeing currently.”
Abigail Moyo, spokesperson of the trade union UASA, said that although slightly higher than the November rate of 2.9%, the December consumer price inflation (CPI) rate of 3.0% was less than expected by economists. “Although slightly higher than the November rate of 2.9%, the December consumer price inflation (CPI) rate of 3.0% was less than expected by economists. As we kick-start the year, UASA hopes the current inflation rate trend will remain stable and bring financial relief for workers for the remainder of the year.”
BUSINESS REPORT