News24 | Food price inflation edges up – but core metric improves

While food price inflation remains moderate, fuel price inflation pushed SA’s inflation rate up in August – and further fuel price hikes in September and October will keep the pressure on.

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SA’s inflation rate has increased marginally to 4.4% in August, up from 4.3% in July, according to Statistics SA.

This is better than the Reuters consensus that inflation would increase to 4.5%.

Month-on-month prices remained, on average, unchanged.

Food price inflation increased for the first time in nine months, but remains moderate at 1.1%, after clocking a 16-year low of 0.9% in July.

August is thus the sixth month in which inflation surpassed the SA Reserve Bank’s 3% target, and the fourth month above the tolerance band of up to 4%. The surge in inflation is widely attributed to supply shocks caused by the US-Iran war that has been ongoing since 28 February.

Statistics SA

The main contributors to the 4.4% annual inflation rate were housing and utilities (5.2%, contributing 1.3 percentage points, and transport (8.8%, contributing 1.2 percentage points).

Annual goods inflation was slightly down, to 3.3% (from 3.4% in July and 4.8% in June), but service inflation inched up again to 5.1% (from 5%), still lower than June’s 5.2%.

Core inflation – excluding fuel, food and electricity costs – was slightly down, from 4.2% to 4.1%, where it was in June.

The SA Reserve Bank, which will announce its interest rate decision after 15:00 on Wednesday, might view this as a positive indication that second-round effects of fuel price increases remain very muted, even if the rate far exceeds the 3% target.

Provincially, inflation varies from 3.1% in Limpopo to 5.4% in the Western Cape.

Poorer households experience 2.9%, while the wealthiest households clock about 4.6%, since their inflation is more weighted towards services.

In terms of food, meat prices were a mixed bag, but there are signs of inflation increasing for staples like bread. The price of white bread has increased by 3.9% year-on-year, compared to the 3.2% increase in July.

Stats SA notes: “Trends for meat were mixed, with pork prices continuing to climb while beef prices remained in deflationary territory.”

Ham and bacon prices rose by 8.6% and pork by 6.6%. Beef prices declined again, with stewing beef 5.3% cheaper than in August 2025, steak 3.9% cheaper and mince 3.8% cheaper.

Hake (fresh or frozen) is 12% more expensive than a year ago, while frozen fish fingers rose by 11.3% and battered or crumbed fish rose by 9.4%.

Stats SA is surprised by a 0.1% month-on-month drop in average alcoholic beverages and tobacco prices. “Typically, this index only declines in December.” Average prices are still 3.6% more than a year ago, however.

Statistics SA

Interestingly, the average price of medicine dropped by 0.1% between July and August, with decreases recorded for painkillers (-0.2%), cough medicine (-0.3%), and vitamin and mineral supplements (-0.3%). Aggregate annual health inflation was 3.4% in August.

Annual transport inflation decreased to 8.8% from 8.9% recorded in July. This was mainly because the petrol price dropped in August, even if diesel prices increased. Annual fuel price inflation remained high at 20%, though.

With September’s increase of R1.34 per litre in 95-octane fuel and up to R3.15 per litre in diesel prices, and an expected increase of more than R3 per litre in October, the expectation is for inflation rates to increase again towards the end of the year.