Fall in food and fuel prices cools inflation
Annual consumer inflation for July was announced at 4.3%, down from the two-year high of 5.0% it reached in June, with a considerable moderation in goods inflation and a shallower decline in services inflation.
Statistics South Africa (Stats SA) said in its release for July 2026 that the consumer price index (CPI) increased by 0.2% month on month in July 2026. Headline inflation cooled for the first time in five months as pressures in municipal tariffs and fuel prices eased.
“The main contributors to the 4.3% annual inflation rate were housing and utilities at 5.2% and contributing 1.3 percentage points; transport at 8.9% and contributing 1.2 percentage points; and insurance and financial services at 5.7% and contributing 0.6 of a percentage point,” Stats SA said.
Stats SA’s CPI print for June showed that inflation had risen to a two-year high of 5.0% from 4.5% in May.
“In July 2026, the annual inflation rate for goods was 3.4%, down from 4.8% in June 2026, and for services was 5.0%, down from 5.2% in June 2026.”
Patrick Kelly, Stats SA head of price statistics, said the headline inflation cooled for the first time in five months, mainly due to softer inflation for food and non-alcoholic beverages, lower municipal tariff increases and a decline in fuel prices.
“Food and non-alcoholic beverages declined to 0.9% in July. This is the lowest print for food and non-alcoholic beverages in more than 16 years — that is since June 2010, when it was 0.7%. Incidentally, that was the month that South Africa hosted the football World Cup. This month’s lower rate was mainly due to cereal products and wheat,” he said.
He said municipalities that implemented their latest tariffs in July gave lower increases in 2026 than in 2025 in most categories.
“Electricity tariffs rose by 8.1% in 2026, down from a rise of 10.4% last year. This is the lowest increase for electricity since July 2020, when it was 7.5%. A similar pattern was recorded for water tariffs, which were higher by 10.2% compared with 2025’s increase of 12.1%, and refuse removal, which was up 4.7% compared with 6.6% last year.”
He said annual transport inflation cooled to 8.9% in July from 12.7% in June. However, while petrol prices decreased by 7.1% and diesel by 11.7% between June and July, pulling the annual fuel rate to 20.6%, petrol was 19.3% and diesel 28.8% more expensive than a year ago.