South Africa's inflation keeps on rising due to sharp food price increases
Category: Economics and inflation
Date: 20 April 2023
Date: 20 April 2023
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South Africa's inflation rate conitinues to rise, putting more and more pressure on out of pocket consumers and providing more ammunitation to the South African Reserve Bank (SARB,) who is hell bent to fight inflation with interest rates to raise interest rates again, even though none of the current drivers of inflation will be slowed down by raising interest rates.
We have compared the SARB using interest rates to lower inflation not caused by consumer demand to someone looking to paint a wall with a hammer instead of a paint brush. The wrong tool is being applied, but seems like SARB know as much about the drivers of inflation as a carpenter knows about nuclear science. |
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The real drivers of South Africa's inflation
The summary below shows the contribution of various broad categories made to the overall level of inflation in South Africa that is currently sitting at 7.1%: So this does not show the inflation rates of these broad categories but rather the contribution these categories contribute to the overall level of inflation. Its clear that food and non alcoholic beverages and transport makes up a significant chunk of the overall inflation levels
Now lets look at the year on year increases (inflation) of the different groups mentioned above:
- Food and non-alcoholic beverages: 2,4%
- Alcoholic beverages and tobacco: 0,4%
- Clothing and footwear: 0,1%
- Housing and utilities: 1,0%
- Household contents and services: 0,3%
- Health: 0,1%
- Transport: 1,3%
- Recreation and culture: 0,2%
- Education: 0,2%
- Restaurants and hotels: 0,2%
- Miscellaneous goods and services: 0,9%
- All Items: 7,1%
Now lets look at the year on year increases (inflation) of the different groups mentioned above:
- Food and non-alcoholic beverages: 14%
- Alcoholic beverages and tobacco: 6.2%
- Clothing and footwear: 2.9%
- Housing and utilities: 1,0%
- Household contents and services: 4%
- Health:5.2%
- Transport: 8.9%
- Recreation and culture: 3.8%
- Education: 5.7%
- Restaurants and hotels: 6.4%
- Miscellaneous goods and services: 5.9%
- All Items: 7,1%