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The three main economic indicators that are quoted by the press and media at large is the inflation rate, unemployment rate and the economic growth rate. But it is hardly ever broken down into substantial detail. This page will look to break down South Africa's inflation rate into more detail.
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Whole fresh chicken average price per province
So what exactly is inflation? And what does it aim to measure? Inflation refers to the rate of change of prices of a basket of goods and services bought by the average consumer over the course of a specified period of time. Int he case of South Africa the official inflation rate measures the rate of change of prices of basket of goods and services consumed and used by the average consumer over a period of 12 months (1 year). All the inflation rates shown below refers to the inflation rate for October 2019. So basically by how much prices increased/decreased from October 2018 to October 2019
First up South Africa's inflation rate per province
Next up South Africa's inflation rate for pensioners
Next we take a look at the inflation rate of goods and services
Next we take a look at the inflation rate of South Africa per expenditure group as reflected by Deciles. Decile 1 shows the inflation rate of the bottom 10% of households in terms of expenditure (the poor) and Decile 10 shows the top 10% of households in terms of expenditure (the rich)
Next we take a look at the inflation rate of the main expenditure groups in the CPI:
First up South Africa's inflation rate per province
- Limpopo: 4.5%
- Western Cape: 4.3%
- Northern Cape: 3.8%
- South Africa: 3.7%
- Free State: 3.7%
- Gauteng: 3.6%
- KwaZulu-Natal: 3.6%
- Mpumalanga: 3.3%
- North West: 3.2%
- Eastern Cape: 3.1%
Next up South Africa's inflation rate for pensioners
- Pensioners inflation: 3.7%
Next we take a look at the inflation rate of goods and services
- Inflation for services: 4.2%
- Inflation for all goods: 3.1%
- Inflation for durable goods: 2.2%
- Inflation for semi-durable goods: 2.0%
- Inflation for non durable goods: 3.5%
Next we take a look at the inflation rate of South Africa per expenditure group as reflected by Deciles. Decile 1 shows the inflation rate of the bottom 10% of households in terms of expenditure (the poor) and Decile 10 shows the top 10% of households in terms of expenditure (the rich)
- Decile 1 (the poorest households in SA): 5.4%
- Decile 2: 4.8%
- Decile 3: 4.2%
- Decile 4: 4%
- Decile 5: 3.8%
- Decile 6: 3.5%
- Decile 7: 3.4%
- Decile 8: 3.4%
- Decile 9: 3.5%
- Decile 10 (the richest households in SA): 3.8%
Next we take a look at the inflation rate of the main expenditure groups in the CPI:
- Food and non alcoholic beverages: 3.6%
- Alcoholic beverages and tobacco: 5.7%
- Clothng and footwear: 2.2%
- Housing and utilities:4.8%
- Household content and services:3%
- Health: 4.8%
- Transport: 0.3%
- Communication: 0.4%
- Recreation and culture: 1.1%
- Education: 6.7%
- Restaurants and hotels: 3.1%
- Miscellaneous goods and services: 5.7%
In economics there are two general types of inflation, or drivers of inflation. Basically what makes prices of items go up or down. The two general types of inflation are known as cost push and demand pull inflation.
Cost push inflation is where increasing costs pushes up the cost of an item until it gets to the end user. For example increased wood prices leads to furniture being more expensive to make which pushes up the price of furniture. Or increased petrol prices makes the transportation cost of goods from the manufacturing plant or farm for example more expensive to get to the end consumer. So this type of inflation is driven by increased input costs in the manufacturing and transportation of goods and services to the end consumer.
Then there is demand pull inflation. This type of inflation is driven by consumer demand. Basic rule of economics is that if demand increases the price will increase as the retailer or business providing the good or service sees increased demand which means he can raise prices to maximise his profits. With a limited supply of goods and increased demand for a good the price of the item will increase and the retailer will have increased profit margins.
Of the two inflation types described above South Africa has seen very little to no demand pull inflation in recent years as consumers are struggling and demand from the consumer side is pretty weak. This can be seen by the very low levels of inflation in durable and semi-durable goods. Durable and semi-durable goods refers to goods that are bought and expected to last anything from 3 to 10 years. Think TV's , Fridges, Furniture etc.
However South Africa has seen significant periods of cost push inflation (higher fuel price due to oil price increases or Rand weakness), sharp movements in food prices set about due to severe droughts which limited the supply of various different food types.
Cost push inflation is where increasing costs pushes up the cost of an item until it gets to the end user. For example increased wood prices leads to furniture being more expensive to make which pushes up the price of furniture. Or increased petrol prices makes the transportation cost of goods from the manufacturing plant or farm for example more expensive to get to the end consumer. So this type of inflation is driven by increased input costs in the manufacturing and transportation of goods and services to the end consumer.
Then there is demand pull inflation. This type of inflation is driven by consumer demand. Basic rule of economics is that if demand increases the price will increase as the retailer or business providing the good or service sees increased demand which means he can raise prices to maximise his profits. With a limited supply of goods and increased demand for a good the price of the item will increase and the retailer will have increased profit margins.
Of the two inflation types described above South Africa has seen very little to no demand pull inflation in recent years as consumers are struggling and demand from the consumer side is pretty weak. This can be seen by the very low levels of inflation in durable and semi-durable goods. Durable and semi-durable goods refers to goods that are bought and expected to last anything from 3 to 10 years. Think TV's , Fridges, Furniture etc.
However South Africa has seen significant periods of cost push inflation (higher fuel price due to oil price increases or Rand weakness), sharp movements in food prices set about due to severe droughts which limited the supply of various different food types.