Poor disproportionately affected by high inflation – SARB
South African Reserve Bank Governor Lesetja Kganyago told MPs on Wednesday that the country’s poor are disproportionately affected by high inflation.
Kganyago briefed Parliament’s finance committee on the central bank’s annual report.
"Inflation by far has been the highest for South Africa's most vulnerable,” Kganyago said.
“We use Stats SA data, and according to this data, if you break the income deciles, you will see that the poorest decile is experiencing high inflation. Inflation is at 4.7%, and the higher income earners are experiencing inflation that is lower than overall inflation.”
The central bank left the repo rate unchanged at 8.25% in July after hiking rates for 10 consecutive times.
This came as consumer inflation eased to 4,7% in July from 5,4% in June.
This is the lowest reading since July 2021, when the rate was 4,6%.
The central bank has come under fire from some quarters for its series of repo rate hikes, but Kganyago said households have been able to absorb higher interest rates.
"Household debt had remained contained. The average for household debt service costs from 2010-2019 averaged 8,6%, and we are at 8.4%. Yet households are still feeling the pressure from what we have seen with inflations and the responses thereof.”
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