KZN floods to impact consumer inflation in May - economist
Headline consumer inflation increased to 5.9% in March, according to the latest figures released by Statistics South Africa on Wednesday.
This was up from 5.7% the previous month.
Price hikes in fuel, food, and housing utilities were the main contributors to the uptick in consumer inflation.
Rising inflation has been a concern for consumers around the world since the gradual lifting of Covid-19 restrictions, not least in South Africa, where the Reserve Bank moved to hike interest rates by 25 basis points each during the last three meetings of its monitory policy committee.
Chief economist at Econometrix Azar Jammine says the devastating floods in KwaZulu-Natal are also bound to impact inflation, although this is only set to be reflected in the May statistics.
“The April CPI will not yet incorporate the full impact of the floods in KZN, which will only really be reflected in the May CPI rate. Certainly, there will be some shortages of goods created by the disruptions to our port facilities and the road network, but the impact should not be any greater than it was during the looting and social unrest experienced in July last year.”
Jammine says the impact of rising inflation on South African consumers is relatively benign.
“A lot is being made of the sharp increases in inflation, but generally speaking a rise in inflation of 0.2% is not sufficient to erode the disposable incomes dramatically when compared to what happened in America and Europe, where the inflation rate has risen by 2% over the last couple of months."
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