South Africa: Inflation slows for a second consecutive month in February
March 22, 2017
In February, consumer prices in South Africa jumped 1.09% from the previous month, which was up from the 0.60% increase in January. The monthly jump stemmed mainly from the core component of consumer prices—which excludes prices for food and energy—which increased 1.10% from the previous month (January: +0.30% month-on-month).
Inflation moderated for the second consecutive month in February, edging down to 6.3% from 6.6% in January. Despite the moderation, inflation is still slightly above the upper threshold of the Central Bank’s target range of 3.0%–6.0%. Annual average inflation inched down from 6.4% in January to 6.3% in February.
In February, Statistics South Africa announced the reweighting and restructuring of the consumer price index, four years after the last revision. The main change in the new index, based on the 2014/15 household survey, is a higher weighting for food and non-alcoholic beverages, and a lower weighting for transport, which reflects upward movements in food costs alongside cheaper fuel. The other price categories remained broadly unchanged. The new index applies to the February result, although previous inflation results will not be affected by the revision.
Author: Ricardo Aceves, Senior Economist