Inflation Edges Up Slightly in October

Inflation ticked higher for the second month in a row in October, rising to 3.6% from 3.4% in September, according to new data from Stats SA.

This is the highest reading since September 2024, when inflation stood at 3.8%.

Food and non-alcoholic beverages inflation continued to ease, slowing to 3.9% in October from 4.5% in September as vegetables, fruit, sugar products, and hot drinks recorded softer price growth.

Transport inflation moved back into positive territory after more than a year of deflation, climbing to 1.5%, having recorded deflation of 0.1% in September. Fuel prices rose slightly, pushing annual fuel inflation to 3.3%, the first positive figure since August 2024. In September 2024 fuel prices had decreased by 2.2% compared to the previous year.

In a reversal of the usual trend, the richest 10% of households faced the highest inflation at 3.9%, whereas lower income groups saw slightly softer increases. The poorest 10% of households experienced annual inflation of 2.3% in October, the lowest of the ten deciles.

The 3.6% number is important because of tomorrow’s Monetary Policy Committee meeting of the South African Reserve Bank (SARB), where a decision will be made on interest rates.

The SARB introduced a new inflation target of 3% earlier this month with a one-percentage point tolerance band, meaning that the de facto new inflation target is between 2% and 4%. This means that the new inflation number falls within that target, which could see the SARB lowering interest rates.