Rosé wine, vaping in as SA revamps inflation basket

South Africa will add rosé wine, snuff and e-cigarette refills to its inflation basket and remove frozen potato chips and condensed milk to better reflect the nation’s fast-changing shopping habits.

South Africa’s statistics agency, in a periodic review, lowered the weight of housing in the basket of goods used to calculate the consumer price index to 24.1% from 24.5%. Even so, it remained the largest category, followed by food and non-alcoholic beverages, whose weight was increased to 18.2% from 17.1%.

Read the full Stats SA document here.

There were no revisions to previously published consumer price index data as a result of the exercise, said Patrick Kelly, chief director of price statistics.

“One of our objectives with this update is to try to improve the alignment between the CPI and the national accounts, in particular, the household final consumption expenditure component,” he told reporters on Tuesday in Pretoria. “Vaping has become quite popular over the last number of years as an alternative to cigarettes, so we are including these.”

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The shake-up will also see the list of items the agency surveys drop to 391 compared with 396, and the reclassification of five indexes including the addition of one new one.

Other changes

• Transport’s contribution drops to 13.9% from 14.4% of the basket
• Fuel is now 3.9%, down from 4.8%

The statistics agency last overhauled the inflation basket in 2022. The changes will be introduced in January’s inflation release on Feb. 19, with December 2024 as the new reference period. The annual rate of inflation last month came in at 3%.

The classification of certain items will also change. Some food products will be

shuffled between groups and insurance and financial services will get their own category with a weighting of 10.4%. It’s moving from the miscellaneous goods and services index.

The overhaul takes effect after a meeting of the central bank this week, which is expected to cut the benchmark interest rate by a quarter percentage point to 7.5% when it delivers its policy decision on Thursday. Officials will weigh their assessment against the backdrop of lower oil prices and a roughly 4% depreciation in the rand against the dollar since their last meeting in November.

Analysts expect inflation to stay below the 4.5% midpoint of the central bank’s target range, where it prefers to anchor expectations, until at least mid-year.

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