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We take a look at the main categories in the South African Consumer Price Index (CPI) and how price changes in the various categories have taken place on a horizon chart over the last couple of years.
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CPI categories in horizon chart
While the South African consumer price index (CPI) is made up of a large variety of goods and services that are priced on monthly, quarterly and annual basis in order to calculate the official inflation rate of South Africa these items can all be grouped into 12 main categories, in which goods and services are classified according to a international classification system called COICOP. COICOP is it the classification of products according to its purpose. The 12 main categories are:
- Food and non alcoholic beverages
- Alcoholic beverages and tobacco
- Clothing and footwear
- Housing and utilities
- Household content and equipment
- Health
- Transport
- Communication
- Education
- Restaurants and hotels
- Miscellaneous goods and services
Readers will immediately notice that while most categories show a light green color which reflects moderate price increases, communication shows a light red colour which is a moderate price decline over the last 3 years. So why is this? Well the fact is the price of data bundles and data in general has been declining over time, and as it makes up a significant part of the communication category the decline in data prices for fixed lines as well as smart phones are being reflected in the graphic above. Other things readers might have noticed is the "step" like increases in categories such as education and miscellaneous goods and services. This is largely due to the fact that education services and the various type of insurance premiums (all types of insurance falls under the categories miscellaneous goods and services) are only collected once a year/ annually, this the annual price increases in education and insurance is reflected in the step like graphics of the education and miscellaneous goods and services category. The image below shows the horizon chart from the start of 2008.
As can be seen from the image above, the price movements of education has been pretty significant with the colour moving from a light green to a darker and brighter green and then moving on to blue and darker blues. The darker the colour gets the more significant the price changes over time. Only alcoholic beverages and tobacco, education and miscellaneous goods and services experienced price increases which warranted the showing of the darker blue colours. Noteworthy is the fact that since 2008 up to the current month, communication has remained in a declining prices phase for the majority of this time period. For more details on the South African CPI, see our Inflation Heat Map page