Mounting inflation punishes consumers
Zululanders warned to 'pork' up piggy bank for rising food inflation.
GROCERY shopping is becoming increasingly tough on the public’s purse as food inflation continues to soar, particularly in KwaZulu-Natal and Limpopo.
According to Statistics South Africa’s (Stats SA) latest report on the consumer price index, the overall food and non-alcoholic beverages index increased by 1.3% between March and April.
Within a month, meat went up by 2%, bread and cereals by 1.7%, milk, eggs and cheese by 1.7%, fish by 1.6%, hot beverages by 0.7%, vegetables by 0.5% and sugar, sweets and deserts by 0.6%.
The only products showing slightly reduced price tags are fruit (-1.5%) and cold beverages (-0.2%).
KZN experienced the second highest annual inflation rate in the country, higher than headline at 6.7% after Limpopo’s 6.8%.
Despite this ‘paper weight’, the monetary policy committee (MPC) on Thursday decided that interest rates will remain unchanged at 5.5%, offering consumers and borrowers some reprieve.
But Head of Department of the Economic Faculty at the University of Zululand, Dr Irrshad Kaseeram, warns that if the Rand keeps hovering above the R10/$ mark, the climbing inflation trend is here to stay.
‘It is going to be an extremely tough year for consumers because of the many reasons.
‘The exchange rate will remain above R10 for at least the rest of the year owing to our current account deficits and the strengthening of the USA economy, which results in foreign investors preferring to transfer their investments to the US economy.
‘This preference is exacerbated by weak expected GDP growth (1.9%-2.5%) in South Africa.
‘We can expect inflation to continue to be a threat and that will feed into higher fuel and energy costs.’
Kaseeram adds that other instigators pushing up inflation are high import costs and capital goods necessary for production processes at Zululand’s key industries.
‘It also affects consumers in terms of more expensive luxury and durable goods like vehicles, clothing and electronic goods – all emanating from depreciated currency.
‘Unless consumers and producers tighten their belts and curb their appetites for imported goods drastically, we will stay in an environment of high interest rates,’ Kaseeram said.
