South African headline CPI accelerated slightly to +3.0% y/y in December from +2.9% y/y in November. The uptick in the headline figure was lower than the expected +3.2% y/y.

As expected, the increase in December’s reading was driven by rising fuel costs, with ‘fuel’ becoming less deflationary for a second month at -10.2% y/y from -13.6% y/y in November.

However, ‘food’ inflation accelerated by less than expected, to +1.7% y/y in December from +1.6% y/y in November. Food inflation remains exceedingly low; we are seeing the second slowest period of food price increases in the history of the new CPI series (2008).

Finally, core CPI (excluding volatile food and energy prices) slowed for a third straight month in December to +3.6% y/y from +3.7% y/y in November.