Inflation increases in June as food prices increase to 15-month high

Inflation increased in June as economists had expected, edging higher to 3% after holding steady at 2.8% in April and May, mainly due to higher food prices.

According to Statistics SA, food inflation accelerated further, with the annual rate for food and non-alcoholic beverages reaching a 15-month high of 5.1% in June.

Meat, and particularly beef, continues to be the main driver of food inflation. Statistics SA points out that beef prices spiked for a third successive month, with high annual and monthly increases recorded for stewing beef, mince and steak.

The price of stewing beef increased by 21.2% annually, the fastest pace on record since the current CPI series began in January 2017.

Other unprocessed food items also saw an uptick, with the annual rates for fruits, nuts, and vegetables remaining in double-digit territory for a second straight month. Statistics SA noted sharp food increases for food products in the 12 months to June for food such as beetroot, lettuce and carrots, while peanuts were slightly cheaper.

This chart shows the food prices with notable changes in June:

ALSO READ: Economists expect small increase in inflation to 3%

Despite beef costing so much more, other foods kept inflation low

Statistics SA says inflation cooled across several food and non-alcoholic beverage categories, with lower prices recorded for white rice, hot cereals and cold cereals that softened the annual rate for the cereal products category.

Although maize meal continues to register high annual increases, the monthly change in June was 0.4%, the lowest since November 2024 (-0.1%).

Several dairy products were also cheaper than a year ago, with lower prices recorded for fresh full-cream milk, fresh low-fat milk and eggs. These decreases helped to pull the milk, other dairy products and eggs index into deflationary territory, recording an annual change of -0.5%.

However, despite this decline, the category recorded a monthly rise of 0.3%, the highest since August 2024 when it was also 0.3%. Cheese products were notable contributors to this increase.

ALSO READ: Inflation unchanged in May at 2.8% as economists expected

Other notable price changes affecting inflation

There were also other notable price changes, as Statistics SA also collects rental data once a quarter. The annual change for actual rentals increased from 2.9% in the first quarter to 3.0% in the second quarter. The rate for imputed rentals also increased slightly, from 2.4% to 2.5% over the same period.

Fuel prices continued a downward trajectory, declining for a fourth consecutive month, with fuel on average 11.2% cheaper than a year ago.

This chart shows the average for the inflation rate since 2009: