Inflation lower in December and lower for 2023 than in 2022

Annual consumer price inflation decreased further in December, easing to 5.1% from 5.5% in November and 5.9% in October, while the consumer price index was unchanged compared to November.

Statistics SA announced this morning that the average inflation rate for 2023 was 6.0%, much lower than 2022’s 6.9% after being relatively high in the first five months of the year, with the headline rate consistently above 6.0%.

Inflation eased below this level for the remaining seven months of the year. The highest inflation reading in 2023 was 7.1% in March and the lowest 4.7%, recorded in July.

Product categories ending the year with annual rates higher than 6.0% in December were food and non-alcoholic beverages (8.5%), restaurants and hotels (7.0%) and health (6.5%).

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Lower prices for some foods

Some food prices were lower in December compared to November. The 8.5% inflation rate for food and non-alcoholic beverages was lower than November’s 9.0%, while inflation softened for bread and cereals, oils and fats; sugar, sweets and desserts, vegetables and hot beverages.

The bread & cereals price index declined by 0.2% between November and December, lowering the annual rate for this category to 7.5%. Maize meal prices eased by 0.9% over the same period, with the average price of a bag of maize meal (2.5kg) declining from R37.04 in November to R36.64 in December.

For oils and fats inflation remained in deflationary territory, recording an annual decrease of 5.9% in December, with cooking oil prices dropping by 1.6% between November and December. Consumers paid on average R35.82 for a 750 ml bottle of sunflower oil in December, much lower than the February 2023 peak price of R37.47 and well below the high of R45.33 recorded in July 2022.

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Prices of these foods increased

Although the sugar, sweets and desserts category as a whole recorded a softer annual inflation rate in December, sugar prices continued to escalate, with white sugar costing 20.1% more than a year ago and brown sugar 24.6% more.

Meat, milk, eggs and cheese, fish, fruit and the miscellaneous sub-category referred to as “other” food also cost more in December.

Annual meat inflation increased to 3.9% in December from 3.5% in November, while sharp annual price increases continued for poultry products, such as chicken giblets (up 18.5%), fresh chicken portions (up 14.6%), non-individual quick frozen portions (up 8.8%), whole chickens (up 8.4%) and individually quick frozen chicken portions (up 6.4%).

The milk, eggs & cheese price index increased by 14.5% in the 12 months to December, higher than November’s rate of 13.9%. The 12-month increase in egg prices was 38.0%, slightly lower than November’s print of 39.9%.

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Other notable price changes

They include:

• Housing and utilities inflation reached 5.7%, the highest annual increase since May 2017, when the rate was also 5.7%. Actual and imputed rentals both recorded a quarterly increase of 0.8%, taking the annual rate for actual rentals to 3.1% and for imputed rentals to 3.0%.
• The transport index increased by 2.6% in the 12 months to December 2023, much lower than the annual rate of 13.9% recorded in December 2022. The slowdown is mainly thanks to lower fuel prices that decreased by 2.5% over the previous 12 months and by 2.7% between November and December.
• Inflation for restaurants and hotels increased to 7.0% from 6.3% in November, with hotel prices increasing by 8.9% in the 12 months to December, higher than the annual rate of 5.6% in November.

These were the most significant annual and monthly price increases in December: