Food inflation jumps to almost 4-year high as consumer inflation keeps rising
Annual consumer price inflation climbed above the 4,5% midpoint of the SA Reserve Bank’s (Sarb's) monetary policy target range last month.
It reached 5.2% in May, up from 4,4% in April.
This is the highest level since November 2018 (also 5,2%) says Stats SA.
Annual consumer price #inflation hit a 30-month high in May, rising to 5,2% from 4,4% in April. The #CPI increased by 0,1% m/m in May 2021.— Stats SA (@StatsSA) June 23, 2021
Listen here for more: https://t.co/fWMN50tcDp#StatsSA pic.twitter.com/tO61Tb2LRp
Director for price statistics, Marietjie Bennett, summed up the main contributing factors:
"The main contributions to May's inflation rate were transport and food and non-alcoholic beverages. Despite a small monthly drop in the fuel price in May, the annual increase quickened to 37.4% from 21.4% in April."
Annual food and non-alcoholic beverages inflation increased to 6,7% in May from 6,3% in April.
This is the highest level since July 2017.
The CPI increase is no reason for panic says George Glynos, Head of Research at ETM Analytics.
We have an inflation risk model that gives us perspective going out 6-9 months and it's still telling us that inflation is likely to be benign, mostly because the credit cycle that we're in at the moment is particularly weak.George Glynos, Head of Research - ETM Analytics
There's not all that much room for inflation to take hold in a sustained manner for a prolonged period of time.George Glynos, Head of Research - ETM Analytics
We're seeing this as temporary. The Reserve Bank I think is viewing it very much the same way - they're not likely to be panicking and responding very aggressively in the short-term...George Glynos, Head of Research - ETM Analytics
... so we look through this spike to a more settled environment later this year or beginning of next year.George Glynos, Head of Research - ETM Analytics
Glynos points out that core inflation is at 3.1% - lower than the 3.6% target.
"It strips out a lot of the volatile prices that have skewed the headline number up."
Listen to Glynos' analysis in the audio clip below:
This article first appeared on CapeTalk : Food inflation jumps to almost 4-year high as consumer inflation keeps rising
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