By Sizwe Dlamini
After two consecutive months of stability, inflation in June 2024 showed a modest uptick, reflecting shifts in consumer prices across various sectors of the economy.
According to the latest Consumer Price Index (CPI) report from the Central Statistical Office (CSO), headline inflation rose by 0.3 percentage points from 4.1% in May to 4.4% in June.
Headline inflation refers to the measure of the total inflation within an economy and includes, items like food, energy, housing, transportation, and other commodities, offering policymakers and economists insights into price stability and consumer purchasing power.
Key findings from the CPI report highlight that in June 2024, the inflation rate for goods stood at 4.6%, slightly higher than the 3.9% observed for services. This uptick was driven by notable increases in specific categories.
For instance, restaurants and hotels saw a dramatic turnaround from -0.1% in June 2023 to a significant 25.6% increase in June 2024, primarily due to rising accommodation costs.
Conversely, the food and non-alcoholic beverages category recorded a decrease in inflation from 15.4% in June 2023 to 4.1% in June 2024. This decline was influenced by slower growth in bread, cereals, fish, and seafood, and negative growth in vegetables during the period.
Examining month-on-month changes, the CPI report noted a 0.5% increase in inflation from May to June 2024, compared to a 0.1% increase observed the previous month.
This acceleration was driven by specific sectors such as alcoholic beverages, tobacco, narcotics, recreation, and transport.
In particular, alcoholic beverages, tobacco, and narcotics experienced a notable uptick from 0.0% in May to 1.9% in June 2024, with wine and tobacco products contributing significantly to the rise.
Similarly, recreation and culture saw prices increase from 0.4% to 1.7%, driven by higher costs for musical instruments and photographic equipment. Transport also rebounded from -0.6% in May to 0.6% in June 2024, primarily due to increased prices in transport equipment services.
The CPI report highlights the dynamic nature of inflation, influenced by a myriad of factors including supply chain disruptions, seasonal variations, and changes in consumer demand.