South Africa’s Consumer Price Index (CPI) surprised to the downside in November, easing to 3.5% year-on-year (y-o-y) from 3.6% in October, slightly below the 3.6% expected by market analysts, according to a Bloomberg survey. The year-to-date average (January–November) now stands at 3.2%, undershooting forecasts from both the South African Reserve Bank (SARB) and the National Treasury.
Core inflation, which excludes volatile food and energy prices, edged higher to 3.2% from 3.1%, while goods inflation slowed to 2.9% y-o-y, and services inflation rose for the third consecutive month to 4.1%, highlighting persistent demand-side pressures.
Breaking down the main contributors:
- Housing and Utilities remained the largest driver, adding 1.1 percentage points to headline CPI, with maintenance and repair costs rising due to electricians (+1.9% m-o-m, +10% y-o-y) and plumbers (+1.9% m-o-m, +3.4% y-o-y). A small decline in gas prices provided modest relief, lowering electricity, gas, and other fuel costs by 0.3%.
- Food and Non-Alcoholic Beverages edged up 0.1% month-on-month, contributing 0.8 percentage points. Annual food inflation accelerated to 4.4% y-o-y, driven by fruits, nuts, oils, fats, and meat, while vegetables and cereals eased.
- Alcoholic Beverages and Tobacco recorded modest increases, with annual tobacco inflation reaching 8.1% y-o-y.
- Transportation costs fell 0.4% m-o-m, mainly due to declining fuel prices, although December is expected to see sharp hikes during the holiday period.
- Healthcare costs, including private hospital fees and medical professional charges, continued to rise, adding to service-related inflationary pressure.
The surprise moderation in headline inflation in November was a key factor behind the SARB’s November interest rate cut, providing some relief to households while underlining the complex interplay between food, energy, and service price pressures in South Africa’s economy.
