Fuel remains the largest single driver of inflation in South Africa, economists warned on Wednesday, after official figures showed annual consumer inflation rising to 4.5 per cent in September from 4.4 per cent in August.
Investec chief economist Annabel Bishop said fuel-price inflation in the index climbed to 27.9 per cent year on year from 20.6 per cent in August, following an October petrol increase of R3.33 a litre. A further rise of nearly R1.70 a litre is signalled for November, she said, which would keep petrol and diesel prices above their second-quarter levels and inflation elevated.
Statistics South Africa's release showed transport costs up 10.8 per cent year on year, contributing 1.5 percentage points to the headline rate, with housing and utilities up 5.2 per cent and insurance and financial services up 5.4 per cent. Food inflation stayed comparatively contained at about 1.0 to 1.2 per cent, helped by falling grain and crop producer prices feeding through to shelves.
Bishop said persistently high inflation could bring another 25-basis-point interest-rate increase, if not in November then in January. Other economists were calmer: PSG's Johann Els said there was still little evidence of second-round pressure beyond fuel and transport, and expected inflation to ease again from around April next year.
