CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Consumer Price Index (CPI), August 2016Embargoed until: 10:00am

@StatsSA

#CPI

CPI

August 2016

The South Africa I know, the home I understand

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Results: August 2016

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Headline inflation

5,9%in August 2016

Down from

6,0%in July 2016

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Monthly change in CPI

-0,1%in August 2016

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

Ja

n-1

4

Ma

r-1

4

Ma

y-1

4

Ju

l-1

4

Se

p-1

4

No

v-1

4

Ja

n-1

5

Ma

r-1

5

Ma

y-1

5

Jul-15

Se

p-1

5

No

v-1

5

Ja

n-1

6

Ma

r-1

6

Ma

y-1

6

Ju

l-1

6

Rate

(y/y

)

Headline inflation Core inflation

Core inflation :CPI excluding food & non-alcoholic beverages, petrol and energy

SARB inflation target

3% - 6%

Headline and core inflation

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Contributions to the annual change of 5,9%

-0,1

0

0,1

0,2

0,2

0,2

0,2

0,3

0,3

0,3

1,1

1,4

1,7

-1,8 -1,3 -0,8 -0,3 0,2 0,7 1,2 1,7 2,2

Communication

Health

Clothing and footwear

Household contents and services

Education

Restaurants and hotels

Alcoholic beverages and tobacco

Transport

Recreation and culture

Miscellaneous goods and services

Housing and utilities

Food and non-alcoholic beverages

Percentage points

Residual

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Items rising faster than average food inflation

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

Ja

n-1

4

Ma

r-14

Ma

y-1

4

Ju

l-1

4

Sep

-14

Nov-1

4

Ja

n-1

5

Ma

r-15

Ma

y-1

5

Ju

l-1

5

Sep

-15

Nov-1

5

Ja

n-1

6

Ma

r-16

Ma

y-1

6

Ju

l-1

6

Rate

(y/y

)

Food and non-alcoholic beverages Bread and cereals Oils and fats

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Items rising faster than average food inflation

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

Ja

n-1

4

Ma

r-14

Ma

y-1

4

Ju

l-1

4

Sep

-14

Nov-1

4

Ja

n-1

5

Ma

r-15

Ma

y-1

5

Ju

l-1

5

Sep

-15

Nov-1

5

Ja

n-1

6

Ma

r-16

Ma

y-1

6

Ju

l-1

6

Rate

(y/y

)

Food and non-alcoholic beverages Fruit Vegetables

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

Ja

n-1

4

Ma

r-14

Ma

y-1

4

Ju

l-1

4

Sep

-14

Nov-1

4

Ja

n-1

5

Ma

r-15

Ma

y-1

5

Ju

l-1

5

Sep

-15

Nov-1

5

Ja

n-1

6

Ma

r-16

Ma

y-1

6

Ju

l-1

6

Ra

te (

y/y

)

Food and non-alcoholic beverages Meat Milk, eggs and cheese Cold beverages

Items rising at a slower rate than average food inflation

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

MP

6,0%

KZN

6,8%

EC

7,3%

FS

6,5%

NW

6,1%

NC

4,8%

WC

5,9%

GP

5,8%

South Africa

5,9%

LP

7,8%

Provincial

inflation

rates

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

3,0

4,0

5,0

6,0

7,0

8,0

9,0

Apr-

14

Ju

n-1

4

Aug

-14

Oct-

14

Dec-1

4

Fe

b-1

5

Apr-

15

Ju

n-1

5

Aug

-15

Oct-

15

Dec-1

5

Fe

b-1

6

Apr-

16

Ju

n-1

6

Aug

-16

Rate

(y/y

)

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Inflation for the five quintiles (year-on-year)

< R26 471 <R43 830 <R75 181 <R172 489 >R172 489

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

-0,4% -0,3% -0,2% -0,1% 0,0% 0,1% 0,2% 0,3% 0,4%

Contributions to the monthly change of -0,1 percentage point

Transport

-0,3%

Residual

0,1%

Food &

NAB

0,1%

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

-6% -4% -2% 0% 2% 4% 6%

Sugar, sweets & desserts 5,1%

Bread & cereals 2,0%

Oils & fats 0,7%

Meat -0,2%

Vegetables -0,5%

Food & non-alcoholic beverages inflation (month-on-month)

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

-6% -4% -2% 0% 2% 4% 6%

Private transport -5,7%

Vehicle purchases 0,5%

Public transport 0,0%

Transport inflation (month-on-month)

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Next reweighting and rebasing of the CPI

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

• Each product in CPI has a weight to reflect relative importance

• Weights reflect total spending patterns of households

• International practice: Reweight at least every 5 years for

relevance to changing consumption trends

• Last reweighting: January 2013

• Next reweighting: January 2017

The weights and basket

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

• Weights and basket based on household expenditure survey (Income and

Expenditure or Living Conditions)

• Survey aimed at providing expenditure, poverty and inequality information

• Data collection from October 2014 to October 2015

The weights and basket

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

‘Sin’ purchasesAlcoholic beverages &

tobacco; gambling

Stats SA LSS, monthly sales

surveys, national accounts

estimates, transaction data

from retail chains

Frequent purchasesFood, personal care,

restaurants etc

Net weight items used vehicles,

insurance, gambling

National accounts

Industry sources

Regulators

Administrative data sources

Some adjustments made to expenditure data

The weights and basket

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

The weights and basket

All urban areas 2008 weights 2012 weights

Food and non-alcoholic beverages 15,7 15,4

Alcoholic beverages and tobacco 5,6 5,4

Clothing and footwear 4,1 4,1

Housing and utilities 22,6 24,5

Household contents and services 5,9 4,8

Health 1,5 1,5

Transport 18,8 16,4

Communication 3,2 2,6

Recreation and culture 4,2 4,1

Education 2,2 3,0

Restaurants and hotels 2,8 3,5

Miscellaneous goods and services 13,6 14,7

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

• Base period where all indices = 100

• Rebasing eliminates influence of historical inflation trends

• Rebasing when reweighting avoids change in index because of weight change

• Month before implementation of new weights = base period

• Current: December 2012 =100

• New: December 2016 = 100

Rebasing indices

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

• Domestic worker wages – new data source (Labour Force Survey)

• Used vehicles – index construction to reflect unique pricing behaviour of market

• Gambling – evaluating different pricing methods

Methodological research

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

PPI also to be reweighted and rebased

• Manufacturing final and intermediate

– National Accounts and Manufacturing large sample survey

• Agriculture, Mining, Water & Electricity

– National Accounts and relevant administrative sources

A word on PPI and UVI

Producer Price Index (PPI)

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Implementation timeline

December 2016Announcement of new

basket, weights and

methodological changes

January 2017Release of final price

updated weights

15 February 2017Publication of January

2017 CPI with new base

period, weights and basket

CPI

August 2016

The South Africa I know, the home I understand

Embargoed until: 10:00am

Thank you!