Codera’s core inflation measure continues to suggest that it is too early to call the abatement of inflation pressures in South Africa. Our measure suggests that there has been more broad-based inflation pressure since 2019 than implied by the Statistics SA core measure of underlying inflation. Both the trimmed mean measure and the core measure that excludes food, non-alcoholic beverages, fuel and energy rose in February 2024, while our measure fell slightly (down 0.1 percentage points). As we argued earlier, measures of trend inflation have been higher than Statistics South Africa’s core measure, and there has been a growing gap between goods and services inflation trends. This has implications for South Africa’s optimal inflation rate (or the appropriate inflation target) since inflation dispersion affects welfare.
