JOHANNESBURG, May 23 (Xinhua) -- South Africa consumer inflation, as measured by the annual change in the consumer price index (CPI), increased to 4.5 percent in April from 3.8 percent in March, according to data released by Statistics South Africa on Wednesday.
Economic experts had predicted that inflation would jump as the various tax and levy increases introduced in the 2018 budget took effect on April 1.
"The uptick was largely on the non-alcoholic beverages, particularly soft drinks, on the back of the introduction of the sugar tax in April 2018. Food products within the basket generally softened due to relatively lower agricultural commodity prices, which in turn, were the reflection of large supplies," Wandile Sihlobo, an economist with the Agricultural Business Chamber, told Xinhua.
"Also worth noting is a deceleration in meat price inflation which is partly underpinned by fairly lower pork prices, as well as an increase in monthly cattle slaughtering activity," Sihlobo said.
Among the products that are in deflation within the food basket is bread and cereals, falling 3.7 percent year-on-year in April 2018.
Meanwhile, Sihlobo expected large maize supplies of 16.4 million tonnes this year, well above South Africa's annual consumption of 10.7 million tonnes.
While the introduction of new taxes presents upward pressures, the relatively large domestic grain and global sugar supplies, combined with the expected increase in cattle slaughtering activity could still contain food inflation at fairly lower levels in the coming months.
At 4.5 percent, April's inflation came in lower than the economist's consensus of 4.7 percent. The inflation is still within the Reserve Bank's 3-6 percent target range, strengthening the case for the central bank to hold interest rates steady.
Meanwhile, Reserve Bank governor Lesetja Kganyago is expected to announce that the monetary policy committee has decided to keep the Bank's repo rate steady at 6.5 percent.
The 72c/liter increase in the price of petrol in April contributed to the fuel component of CPI showing 9 percent annual inflation, the figures show.
Prices for alcoholic beverages climbed by 1.2 percent in March compared with February 2018, according to the inflation data, followed by a further 1.6-percent increase in April. Beer experienced an annual price increase of 8 percent," Statistics SA said.
Overall food inflation was 3.7 percent, with fruit prices falling 8.2 percent, and bread and cereal prices falling 3.7 percent over the year. Enditem
