Economist, Dawie Roodt, says South Africans could see an increase in interest rates next month due to the hike in inflation.
Statistics SA today announced that the consumer price inflation increased to 5.4% in September from 4.8% in August.
This is the second consecutive increase, bringing the rate to the same level as it was in June this year.
According to the data agency, the main contributors to the increase were food and non-alcoholic beverages; housing and utilities; miscellaneous goods and services, and transport.
Roodt says South Africans should probably expect a 25 basis points increase in the repo rate that’s set to be announced on 23 November.
However, he says, the Monetary Policy Committee (MPC) could consider not hiking the interest rates because of the anticipated drop in fuel prices for next month.
He has also cited the strengthening of the rand as a possible factor that could lead to rates left unchanged.
South Africans have taken to social media, saying the latest data shows a grim reality for the country.
Economists please help us. What is driving inflation in SA? Or is this imported inflation? The Reserve Bank has been constraining monetary supply through high interest rates & fiscal policy the past few years cannot be described as expansionary, yet inflation is unrelenting🙄 https://t.co/F8QpmhyOEv
— Vusumuzi (@VusumuziWaZweli) October 18, 2023
Squeezed pockets: South Africa’s inflation quickened in September, driven by food prices that firmed 8% and electricity tariffs that were also higher by 15%. This means SA’s inflation rate leapt up from 4.8% in August to 5.4% in September. Reserve Bank has warned of rate hike
— Tawakarombo&Assciates (@tawakarombo) October 18, 2023
— Herman Pooe (@hermanAKAsox) October 18, 2023
Written by: Nonhlanhla Harris