Connect with us

Hi, what are you looking for?

World News

South African inflation hits new 13-year high

#South #African #inflation #hits #13year #high

Inflation in South Africa accelerated to a 13-year high in July, mainly due to rising food, transport and electricity prices, official data showed on Wednesday as workers protested the high cost of living.

Consumer prices rose at an annual rate of 7.8 percent in July, up from 7.4 percent in June, national statistics agency StatsSA said in a statement.

The release of the latest statistics has coincided with protests in major cities over deteriorating economic conditions, which have been particularly devastating for the poorest in the continent’s most industrialized country.

Strikers led by South Africa’s two largest unions have called for government action to tackle rising poverty and the cost of living in the world’s most unequal country.

While the new inflation number is bad news for consumers, economists believe the country is likely to reach a turning point and believe inflation could ease in the coming months.

According to Annabel Bishop, Chief Economist at Investec Bank, this is “probably the peak of the current inflation cycle”.

“Inflation will be lower by this time next year,” said Dawie Roodt, an economist at financial services firm Efficient Group.

Inflation has soared around the world, fueled by supply chain disruptions following the easing of Covid restrictions, as well as rising energy and food prices following the Russian invasion of Ukraine.

For South Africans, this has led to rising costs for basic necessities such as food, electricity, fuel and medicines, according to the statistics agency.

Although grain prices are falling internationally, “it takes up to two years for a price shock to feed through to the economy,” Roodt said.

Bread and cereal prices rose 13.7 percent in July versus 11.2 percent in June. That means a loaf of white bread now costs 17.84 rand ($1.05), compared with 15.57 rand ($0.91) a year ago, the statistics agency said.

The fuel price has increased by 56.2 percent compared to the previous year.

Rising inflation prompted the country’s central bank to push through the steepest hike in the benchmark interest rate last month, raising it by three-quarters of a percentage point to 5.5 percent.

Roodt said another hike is likely to come.

It will spiral across the economy as higher interest rates mean higher debt repayments for consumers, which will impact household budgets, said Christie Viljoen, senior manager and economist at PwC South Africa.

“This in turn leads to lower purchasing power for consumers and businesses. This is a challenge for South Africa, which is a consumer-driven economy,” he said.

The rising cost of living is taking its toll on a population where the unemployment rate is nearly 34 percent.

The government on Wednesday called unemployment figures a “major concern” and said more needs to be done to improve conditions post-pandemic.

“Job creation and economic recovery remain the government’s top priorities,” said Cabinet spokeswoman Phumla Williams in a statement.

Social Tags:
#South #African #inflation #hits #13year #high

You May Also Like

press release

With a deep understanding of the latest tech, Erbo helps businesses flourish in a digital world.


State would join dozens of others in enacting legislation based on federal government’s landmark whistleblower statute, the False Claims Act

Health News

The cosmetic and facial plastic surgery practice is hosting a grand opening celebration and ribbon cutting for its new Chattanooga state-of-the-art location.

press release

#Automotive #Carbon #Canister #Market #Projected #Hit #USD New York, US, Oct. 24, 2022 (GLOBE NEWSWIRE) —  According to a comprehensive research report by Market...