Even though inflation fell to 4.3% in July from 5% in June, housing and utilities, transport, and insurance and financial services continue to be cost drivers within the figure.
Statistics South Africa said housing and utilities inflation was 5.2%, transport inflation was 8.9%, while insurance and financial services rose 5.7%. Together, the three categories contributed 3.1 percentage points to the 4.3% headline rate.
Electricity was a particular source of pressure in housing and utilities, with prices rising 8.3% year-on-year and 7% month-on-month after higher tariffs were implemented in July. Water supply and miscellaneous services rose 6.4% over the year, while actual rentals increased 4.1%.
Investec chief economist, Annabel Bishop, said the biggest cost pushes were housing and utilities as upward pressure came from rentals, electricity, and water prices, with the annual increase in electricity prices captured in July.
Dr Lerato Ntuli, economist at Anchor Capital, said the electricity increases implemented in July were a key source of pressure in the category, resulting in housing and utilities inflation remaining elevated even as the pressure slowed.
