Ina Opperman

By Ina Opperman

Business Journalist

Inflation lower in December and lower for 2023 than in 2022

Inflation decreased in December in line with economists’ expectations, which is good news for the repo rate that will be announced on Thursday.

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%).

ALSO READ: Economists expect repo rate to stay unchanged

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.

ALSO READ: Inflation down in November, but food is up – here are the culprits

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%.

ALSO READ: Inflation up by 0.5% in October

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:

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