Consumer Price Inflation Unchanged in February Amid Rising Food and Utility Costs
Annual consumer price inflation in South Africa held steady at 3.2% in February, reflecting a delicate balance between rising costs and stabilizing trends in several sectors. Statistics South Africa (Stats SA) reported that this figure remained unchanged from January, marking the fourth consecutive month above the four-and-a-half-year low of 2.8% recorded in October 2024. Notably, the monthly change in the consumer price index (CPI) was reported at 0.9%, indicating some fluctuations within specific categories while overall rates steadied.
According to Stats SA, the primary factors contributing to the annual inflation rate included housing and utilities, food and non-alcoholic beverages, as well as services related to restaurants and accommodation. Together, these sectors provided significant weight to the inflation pressures felt across the economy.
Overall, the annual rate for food and non-alcoholic beverages rose to 2.8% in February, up from 2.3% in January. This surge in food costs was significantly driven by escalating prices for staple goods. Inflation in the price of maize meal—a crucial dietary staple for many households—hit a staggering 17-month high. Concurrently, inflation for samp reached a 19-month high during the same month. Stats SA indicated that the price index for maize meal soared by 10.6% annually, with a 5kg bag costing R74.91 compared to R68.52 the previous year. Similarly, the price of 1kg of samp jumped from R19.28 to R22.86 over the same period.
“The rise in prices is driven by inflationary pressure from farming and manufacturing of maize according to the latest producer price index data,” noted Lekau Ranoto, Stats SA's Director of CPI Operations.
In the context of these rising staple prices, it is essential to realize that not all sectors experienced similar increases. Consumer prices for meat remained stable during February, with no change from January, maintaining an annual rate of 0%. This stability in meat prices contrasts sharply with the inflationary trends in other categories. However, the price index for hot beverages displayed notable growth, with an annual change reflecting a 14.6% increase in February, climbing from 13.7% in January. Instant coffee, in particular, spiked to an annual inflation rate of 19.0%, marking the highest in six months.
Alongside food categories, other costs also saw notable increases. Medical aid premiums surged by 10.5% this year, compared to a 10.3% rise in 2024, while health services rose 6.1%, compared to only 5% last year. Fuel prices contributed to inflationary effects as well, with an observed increase of 3.9% between January and February 2025. The price of 95-octane petrol climbed to R22.41 inland, exercising pressure on households despite remaining lower than the R23.24 seen a year prior.
“Recreation, sport and culture, food and non-alcoholic beverages, alcoholic beverages and tobacco and communication recorded higher annual inflation rates in February,” Ranoto commented, indicating a broader pattern of rising costs affecting various sectors.
Despite prevailing inflationary pressures in certain categories, it is noteworthy that inflation witnessed some cooling in various products. Areas such as personal care, health, accommodation, and household equipment recorded subsiding inflation rates, providing some respite for consumers amid escalating costs.
As consumers navigate the ongoing adjustments in pricing across various necessities, the potential impact on forthcoming monetary policy remains an area of keen interest. Speculation is running high regarding the South African Reserve Bank's response in relation to the repo rate, a crucial factor in national economic management. Observers will keenly watch for updates from regulators, particularly after these inflation measurements.
In summary, while inflation figures remained steady in February, contributing factors show a complex interplay involving rising food and utility costs, stagnating meat prices, and fluctuations in the broader consumer market. Retailers and consumers alike remain attentive to changes that may arise in the coming months as economic indicators continue to evolve.
