Good news about inflation in South Africa
South Africa’s annual inflation rate rose less than expected in September, even after energy prices soared because of supply constraints caused by conflicts in Ukraine and the Middle East.
Consumer prices rose 4.5%, compared with 4.4% in August, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday.
The median estimate of 17 economists in a Bloomberg survey was 4.7%.
Inflation will likely continue to accelerate as fuel prices, which hit a record this month, are set to rise again in November.
Food-price pressures may also build as the prolonged wars in Ukraine and Iran have disrupted fertiliser supplies, and a super El Niño could lead to drought conditions.
South African Reserve Bank Governor Lesetja Kganyago has repeatedly said policymakers remain committed to getting inflation back to their 3% goal after a quarter-point hike last month to 7.25%.
The central bank in its latest monetary policy review likened its approach to firefighting: the sooner a blaze is extinguished, the easier it is to contain.
It also said its priority is to prevent the current inflation surge from becoming entrenched and would “act decisively to prevent that from happening.”
Forward-rate agreements used to speculate on borrowing costs are pricing in two more rate hikes over the next year.
Conversation
1 comments“It also said its priority is to prevent the current inflation surge from becoming entrenched and would “act decisively to prevent that from happening.”
-Rubbish. If that was so, then following bad ANC policies would be reversed immediately:
1) Cadre deployment: Incompetent overpaid cadres parachuted into positions of power run things into the ground, raise cost of sales astronomically. Cadres deliver irregular and W&F spending, make the bad decisions, mal-invest in ‘projects’ that dont payback, leading to the strategic failure that require endless bailouts. The damage done by cadre deployment is immense, inflationary.
2) AA/EE: Raises cost of labour without raising outputs, causes inefficient workforce, leads to overstaffing in SOE’s, this curtails cash available for services and investment in infrastructure. These costs is inflationary.
3) BEE: Excessive margins under BEE’s rules legalising laundering diverts money for services, into the hands of ANC elite. BEE causes economic exclusion, the cost of diverted cash and gate-keeping is inflationary.
4) Uncontrolled crime: Looting etc by bad actors with no consequence drains the tax revenue available to restitution and growth of SA economy. It thus undermines our National Interest.
These ‘problems’ (enabled by bad policy) waste more than half our tax revenue, have trashed most SOE’s, and crushed 80% of municipalities. They’re fatal to SA’s future.