SA Consumer Watch – January 2022

Inflationary pressures continue mounting with no signs of normalisation as fuel prices increase. The petrol price increased by 53c/litre to R19.42/litre and diesel increased by 79c/litre to R17.48/litre in February. The cost to refuel a midsized petrol engine car (55 litres) is R1 068 (+2.8% m-m). CPI inflation edged up from 5.5% to 5.9% and PPI inflation increased by 120bps to 10.8% in December. The FAO food index fell by a modest 1.2 pts to 133.7 pts (implying an inflation rate of 23.7% y-y) in December. The weaker rand could add to inflation pressures.
Despite the inflation pressures, retail sales growth continued with growth of +3.3% y-y (real) in November. The food and beverage sales grew by +21.6% y-y (nominal) in November (+36.3% y-y in October). Vehicle sales growth rebounded in January, with the y-y growth rate at +19.4% (-4.1% y-y in December), and the ABSA Purchasing Managers Index (PMI) gained 3.0 pts to 57.1 pts. Private Sector Credit Extension remains soft, increasing by +2.6% y-y in December.