Key facts
- South Africa's headline consumer inflation slowed to 4.3% year-on-year in July.
- This is down from 5.0% in June and below economists' expectations of 4.5%.
- The July inflation rate is the lowest recorded in three years.
- Lower transport costs, influenced by falling fuel prices, were a key factor in the slowdown.
- Monthly inflation decreased to 0.2% in July from 0.7% in June.
South Africa's headline consumer inflation decelerated more than anticipated in July, reaching 4.3% year-on-year compared to 5.0% in June. This figure fell below the Reuters poll of economists' forecast of 4.5%. The slowdown was primarily driven by a decrease in transport costs, as fuel prices retreated following a temporary U.S.-Iran truce. South Africa, which imports most of its fuel, is susceptible to global energy price fluctuations.
On a monthly basis, inflation was 0.2% in July, a significant drop from 0.7% in June. Food and non-alcoholic beverages inflation also eased, falling to 4.5% from 4.6% in the previous month, though specific items like bread and cereals saw price increases. Transport inflation softened to 4.2% from 5.5%, with fuel prices declining for the second consecutive month. Housing and utilities saw an annual increase of 5.3%.
This latest inflation reading is the lowest recorded in South Africa in three years, since July 2021. Other African nations like Nigeria and Ghana also reported softer inflation in July, with Ghana experiencing its first decrease since March.