Consumer inflation plummets to 4.4%

Consumer inflation has slowed sharply to 4.4% from 5.3% in December, Statistics South Africa announced on Wednesday.

 

South African Chamber of Commerce and Industry economist Richard Downing says the drop in inflation can be attributed to the drop in fuel prices.

 

The rollover effect can be seen in the food prices, he adds.

 

"Consumers should not be too excited by the drop in inflation just yet, because a lower inflation does not mean that prices are not increasing, but rather that they’re increasing at a lower rate,” Downing says.

 

With the rand having dropped to R11.68 last week, its lowest since 2008, and the petrol price climbing up again, Downing warns consumers not take on more debt.

 

“Consumers should also remember that it was only the fuel price which declined and it is not wise for them to make the assumption that everything else will decline,” he says.

 

(File Photo: Gallo Images)