Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 18, 2024

Consumer Inflation slowing down further

Inflation eased from 4.6% in July to 4.4% in August 2024, aligning with market expectations. Month-on-month growth was minimal at just 0.1%. The rise in inflation for August was driven by:

  • Housing and utilities (including electricity and other administered prices), which increased by 4.8%, contributing 1.1 percentage points to inflation.
  • Miscellaneous goods and services, which rose 7.0%, adding 1.0 percentage point.
  • Food and non-alcoholic beverages, which increased by 4.7% year-on-year, contributing another 0.9 percentage points.
  • Transport services, which include fuel and maintenance costs, rising 2.8% and adding 0.4 percentage points to the overall inflation rate.

These increases were not unexpected, as these categories have significantly eroded consumer purchasing power since inflation began rising sharply in 2022. The ongoing inflationary pressures raise affordability concerns, as household income has not kept pace with rising prices, leading many families to take on more debt to maintain their standard of living. This higher indebtedness makes consumers even more vulnerable to interest rate hikes while they are already struggling with cost-of-living increases along with elevated debt payments.

It’s important to note that the price increases are not driven by rising domestic demand but rather by external factors, including electricity supply constraints, the costs associated with alternative power generation, and escalations in import prices, which are passed on to consumers through the market value chain.

While inflation continues to rise, it is doing so at a slower pace. Contributing factors to this moderation include:

  • An appreciation and increased stability of the Rand/Dollar exchange rate since the May 2024 elections, as investors and market participants have shown greater optimism following the formation of the Government of National Unity (GNU) and early policy signals.
  • Reduced power supply constraints, which have improved overall economic activity in South Africa during the second quarter of 2024.

Given the moderating inflation, better-than-expected economic growth, improved electricity supply, and enhanced market sentiment, the Reserve Bank is likely to lower interest rates in September 2024. This reduction may help boost demand slightly and contribute to stronger economic growth in South Africa than initially anticipated.

Back to News

More Coverage

Mining Production and Sales for February 2026

Discover the dynamic shifts within South Africa’s mining sector with our latest analysis. In a remarkable February 2026 performance, mining activities surged by 9.7%, spearheaded by dramatic increases in PGM, chromium ore, manganese, and gold production. Despite a quarterly dip, February’s nominal sales skyrocketed by 58.3%, driven by remarkable gains in platinum and gold. As the backbone of South Africa’s economy, the sector faces evolving global challenges and opportunities, from new US tariff measures to geopolitical tensions affecting global trade and energy prices. Stay ahead with insights into the sector’s resilience and strategic importance. Read the full article to understand the trends shaping South Africa’s economic landscape.

The Fuel Factor: Balancing Sticky Inflation with a R415 Billion Investment Anchor

Discover how South Africa is navigating the turbulent waters of global economic pressures and local inflation with a strategic fuel price adjustment and a major boost from a R415 billion investment windfall. As rising Brent Crude prices and a fluctuating Rand impact fuel costs and inflation forecasts, all eyes are on the South African Reserve Bank’s next move. Meanwhile, the Sixth South Africa Investment Conference has sparked optimism, with substantial commitments in the energy and technology sectors, promising a resilient economic future. Dive into the full article to explore the intricate balance between surviving immediate economic challenges and positioning South Africa as a hub for global investment amidst a world in flux.

South African Gold and Foreign Exchange Reserves for March 2026

South Africa’s reserves fell in USD terms in March 2026 as the Rand weakened amid Middle East tensions, though higher gold prices supported reserves in Rand terms. Rising oil prices and currency pressure point to higher inflation risks, while ongoing geopolitical tensions and US trade measures are likely to keep markets volatile.

A Watershed Moment: Global Ceasefire and Massive Oil Correction Offer Crucial Relief for the SA Economy

A sudden global shift has delivered much-needed relief for South Africa. Following a Middle East ceasefire, oil prices have dropped sharply and the Rand has strengthened—easing pressure on fuel costs and inflation. While earlier price spikes still weigh on the outlook, this combined correction offers a critical window for economic stability, improved consumer confidence, and renewed growth momentum.

The Great Fuel Buffer

South Africa finds itself balancing global energy shocks with decisive local action. As rising oil prices threaten to strain consumers and key industries, government intervention has softened the immediate impact—highlighting both the urgency of the moment and the need for smarter, more resilient fiscal tools to manage future volatility.