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In today's blog we take a look at the latest official inflation figures as published by Statistics South Africa for August 2017. We take a look at the inflation rate per income group. And we find that the poor is a lot better of currently in terms of inflation compared to the rich.
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Inflation per expenditure decile
The bar chart below shows the annual inflation rate (August 2017 prices compared to August 2016 prices) per expenditure decile. The expenditure deciles shows expenditure groups in South Africa. Decile 1, shows the 10% of lowest spending households. And Decile 10 shows the spending of highest spending 10% of households.
As can be seen from the bar chart above, the lowest spending 10% of households (which we would assume is the poorest 10% of households) has a inflation rate far lower than the highest 10% of spending households (which we would assume to be the richest 10% of households in South Africa).
Interest to see is how the inflation rate goes progressively higher as the Deciles go from Decile 1 to Decile 10. It is a very smooth transition in inflation from the poor to the rich. It is curious that the poorest 10%'s inflation is so low considering the fact that they spend a large portion of their overall spending on food, and food inflation is sitting at 5.7%. Essentially after the impact of food, there has basically been no real inflation in the rest of the items bought by the poorest 10% of households, as Food makes up the total move in inflation of the poor.
One wonders whether this number is correct as it is rather counter intuitive
Interest to see is how the inflation rate goes progressively higher as the Deciles go from Decile 1 to Decile 10. It is a very smooth transition in inflation from the poor to the rich. It is curious that the poorest 10%'s inflation is so low considering the fact that they spend a large portion of their overall spending on food, and food inflation is sitting at 5.7%. Essentially after the impact of food, there has basically been no real inflation in the rest of the items bought by the poorest 10% of households, as Food makes up the total move in inflation of the poor.
One wonders whether this number is correct as it is rather counter intuitive