The consumer price index rose 6 percent year-on-year following 6.3 percent increase in June, the Statistics South Africa said.
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On the CPI “Goods” side, the Transport CPI inflation rate slowed from 3.3% year-on-year in the previous month to 3,1%, reflective of greater petrol price year-on-year deflation in July, while the CPI for Recreation and Culture also saw its inflation rate slow.
Although the main culprit for the said decline is the Housing & Utilities category, Transportation is to be blamed as well, with its cost still in the red at -3.5% in July, enjoying a slight ease in its cost from the recorded decline of -4.3% last month.
Core inflation is derived from a consumer basket that excludes the costs of accommodation and private road transport. However, core inflation – which strips out accommodation and private road transport costs to better gauge everyday expenses – ticked up 1 per cent.
Indeed, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) reiterated on Tuesday that headline inflation “likely troughed in Q2, and is projected to rise in the coming months”.
Prices of retail goods fell 0.2 per cent, compared to an increase of 0.5 per cent in June.
Economists polled by Reuters expected CPI to slow to 6.1 percent year-on-year in July. This was mainly due to steeper discounts on clothing and footwear during the GSS, said MTI and MAS.
The cost of electricity, liquefied petroleum gas and gas fell by 12.7 per cent, compared to the 13.7 per cent decline in June. This was due to a smaller decrease in electricity tariffs on a year-ago basis. “The plunge in July NODX (non-oil domestic exports) suggests that external demand headwinds have persisted or even intensified into H2”.
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Consumer inflation data are keenly watched for clues about the direction of the Reserve Bank’s monetary policy.
