inflation monitor july 2018 uselrs.org.za/media/2018/8/8c3df355-2d25-4513-b0de-d6045e94d38b... ·...

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Knowledgeistooimportanttoleaveinthehandsofthebosses

INFLATIONMONITORJULY2018

1

TheConsumerPriceIndex(CPI)increasedto5.1%inJuly2018

The term inflation means a sustained increase in the general level of prices for goods andservices.It’smeasuredasanannualpercentageincrease(forexample,July2017toJuly2018).Takenotethatafallingrateofinflationmeansthatpricesarerisingataslowerrate.

TheheadlineInflationrateatJuly2018was5.1%yearonyear.Onaverage,pricesincreasedby0.8%betweenJulyandJune2018.Theinflationrateof5.1%iswithinthe3%-6%targetrangeofthereservebank.

Thefoodpricedecreasedto3%inJuly2018from3.1%inJune2018.

Transportinflationincreasedto10%inJuly2018from7.3%inJune2018.

Publictransportinflationincreasedto3.3%inJuly2018from3.1%inJune2018.(Buses,trainsandotherformsoftransportthatareavailabletothepublicchargesetfaresandrunonfixedroutes.)

Administrator’s price (school fees, telephone fees, electricity, trains, and petrol/paraffin)increasedto12.4%inJuly2018from8.3%inJune2018.

TheAnnualInflationRate(CPI)andSelectedPriceCategories

Source:StatisticsSouthAfrica

Thepricesoftransport,publictransportandadministeredpricescontinuetodriveinflationinJuly2018.Steepincreases inthesecommoditieswillthereforehaveagreater impactonpoorhouseholds.TheincreaseininflationwillalsoprompttheReserveBanktoincreaseitsreporate,whichmighthaveanegativeeffectonconsumersandpeoplewhoareservicingdebt.

Jun17

Jul17

Aug17

Sep17

Oct17

Nov17

Dec17

Jan18

Feb18

Mar18

Apr18

May18

Jun18

Jul18

CPI 5.1% 4.6% 4.8% 5.1% 4.8% 4.6% 4.7% 4.4% 4% 3.8% 4.5% 4.4% 4.6% 5.1%

Food

7%

6.8%

5.7%

5.4%

5.3%

5.2%

4.9%

4.6%

4%

3.6%

3.7%

3.0%

3.1%

3%

Transport

3.3%

1.0%

3.9%

5.6%

5.4%

4.4%

6.4%

4.4%

3.2%

2.8%

5%

5.0%

7.3%

10%

PublicTransport

1.2%

1.7%

1.6%

2.3%

2.6%

2.5%

3.4%

0.9%

1.6%

3.1%

2.7%

2.0%

3.1%

3.3%

Administered

Prices

4.9%

1.8%

4.4%

6.1%

5.8%

5.1%

6.9%

5.6%

4.3%

3.7%

6.2%

6.2%

8.3%

12.4%

2

ConsumerPriceIndex(CPI)andselectedpricecategoriesApril2016toJuly2018


ThetablebelowshowsitemsthatcostmoreinJuly2018

July2018Meat 5.6%Fish 6.6%Vegetables 8.8%WaterandOtherServices 11%Non-AlcoholicBeverages 6.5%AlcoholicBeverages 7.9%PrivateTransportOperation 20.3%ElectricityandOtherFuels 7.7%Fuel 25.3%PrimaryandSecondaryEducation 7.7%TertiaryEducation 5.3%Books,Newspapers&Stationery 5.6%Restaurants 6.5%Non-AlcoholicBeverages 6.2%MedicalServices 5.8%Insurance 7.2%FinancialServices 6.6%

0,0%2,0%4,0%6,0%8,0%

10,0%12,0%14,0%

CPI(AVERAGE) FOOD TRANSPORT PUBLICTRANSPORT ADMINISTEREDPRICES

3

ConsumerPriceIndex(CPI)PerExpenditureDecile

StatisticsSouthAfricadivideshouseholdmonthlyexpenditure into10decile.Thetableshowsthat decile 10 expenditure was higher than decile 1 expenditure, indicating a high level ofinequality.

MonthlyexpenditureInflationRate

Jul-18

AverageannualCPI 5.1%

Decile1 UptoR1477permonth 3.5%

Decile2 R1477uptoR2456permonth 3.4%



Decile5 R4742uptoR6151permonth 4%

Decile6 R6151uptoR7907permonth 4%




Decile10 R22492andmore… 5.5%


The tableaboveshows that there’sadifferent inflation rate fordifferentgroupsofquintiles.Inflationislowerinthe‘verylow’decile(1)at3.5%followedbythe‘low’decile(2)at3.4%.Decile9and10hadthehighestinflationrateof5.6%and5.5%.Thisishigherwhencomparedtotheannualiseinflationof5.1%.

4

ProvincialInflationRateJuly2018


TheprovinceswithannualinflationratelowerthanorequaltoheadlineinflationwereLimpopo(4%),Mpumalanga (4.1%),Northern Cape (4.1%),NorthWest (4.2%), KwaZulu -Natal (4.5%),EasternCape(4.5%)andFreeState(4.8%).

GautengandWesternCapeprovinceshadanannualinflationratehigherthanheadlineinflationat5.2%and5.9%respectively.

TheConsumerPriceIndex(CPI)

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave.

2016 6.2% 7% 6.3% 6.2% 6.1% 6.3% 6% 5.9% 6.1% 6.4% 6.6% 6.8% 6.4%

2017 6.6% 6.3% 6.1% 5.3% 5.4% 5.1% 4.6% 4.8% 5.1% 4.8% 4.6% 4.7% 5.3%

2018 4.4% 4% 3.8% 4.5% 4.4% 4.6% 5.1%


Theconsumerpriceindexisknownastheheadlineinflationrateandisalsoreferredtoastheofficialinflationrate.ThemonthtomonthpricesofoverathousandgoodsandservicesgointothecalculationofCPI.

4 4,1 4,1 4,2 4,5 4,5 4,85,2

5,9

0

1

2

3

4

5

6

7

5

TheFoodPriceIndex


2016 7% 8.8% 9.8% 11.3% 10.8% 11% 11.5% 11.6% 11.6% 12% 11.8% 12% 11%

2017 11.8% 10% 8.7% 6.6% 7% 7% 6.8% 5.7% 5.4% 5.3% 5.2% 4.9% 0.5%

2018 4.6% 4% 3.6% 3.7% 3% 3.1% 3%


Thefoodpriceindexshowstheincreaseinthepriceleveloffoodproductsonly,onamonthlybasis.ThisrateisincorporatedintheoverallCPIinflationrate.

TheTransportPriceIndex


2016 5.5% 8.7% 4.5% 2.7% 3.1% 3.3% 3.1% 2% 3.5% 4.3% 6.4% 5.7% 4%

2017 6.7% 7.2% 7.7% 4.6% 5.2% 3.3% 1.0% 3.9% 5.6% 5.4% 4.4% 6.4% 1%

2018 4.4% 3.2% 2.8% 5% 5% 7.3% 10%


Thetransportpriceindexprovidesanindicationoftheincreaseinthenpriceleveloftransportitems in the basket of goods and services that make up the inflation index. This rate isincorporatedintheoverallCPIinflationrate.

TheAdministeredPriceIndex


2016 8.8% 11.5% 6.4% 4.5% 4.7% 4.9% 3.1% 2% 3.2% 4.2% 5.6% 5.1% 5%

2017 6.2% 6.6% 8.4% 6% 6.7% 4.9% 1.8% 4.4% 6.1% 5.8% 5.1% 6.9% 6%

2018 5.6% 4.3% 3.7% 6.2% 6.2% 8.3% 12.4%


Anadministeredpriceisdefinedasthepriceofaproduct,whichissetconsciouslybyanindividualproducerorgroupofproducersand/oranyprice,whichcanbedeterminedor influencedbygovernment,eitherdirectlyor throughoneorothergovernmentagencies/institutionwithoutreference to market forces. For example, school fees, telephone fees, electricity, trains,petrol/paraffin, cell calls and public transport. This rate is incorporated into the overall CPIinflationrate.

6

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inflation monitor july 2018 uselrs.org.za/media/2018/8/8c3df355-2d25-4513-b0de-d6045e94d38b... ·...

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