Annual inflation edged up for the second consecutive month in December to 3% from 2.9% the month before.
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Annual inflation edged up for the second consecutive month in December to 3% from 2.9% the month before, bringing 2024’s average annual consumer inflation to 4.4%, Statistics South Africa said on Wednesday.
On a monthly basis, the headline consumer price index rose by 0.1% in December.
The annual inflation rate was driven up by housing and utilities (4.4%), miscellaneous goods and services (6.6%), food and non-alcoholic beverages (2.5%) and alcoholic beverages and tobacco (4.3%).
But the December print came in lower than economists had predicted.
Investec economist Lara Hodes, for example, expected the annual rate to rise to 3.1% driven mainly by transport and food costs. But inflation for transport eased in December to 2%. Nedbank economists anticipated 3.3% annual inflation for December, also as a result of higher fuel costs and the “normalisation” of the base in food inflation.
“Inflation will probably continue to increase gradually during 2025 but remain below the Reserve Bank’s 4.5% target until the third quarter,” Nedbank said.
The central bank is expected to announce another 25 basis point interest rate cut on 30 January, according to Investec economist Annabel Bishop, but the reduction cycle is expected to end by March when the monetary policy committee meets.
The Bureau for Economic Research expects annual inflation to average 4.5% this year, lower than the previous forecast of 4.8%.
On Wednesday, Stats SA announced that it was introducing an insurance and financial services category to the key inflation indicators it monitors this month to keep in line with international standards.
“The new version aims to reflect changes in consumer expenditure patterns, including the impact of new technology. The greater details now available will improve the international comparability of economic data,” the statistics agency said.