Inflation We’ll huff and we’ll puff
Things aren’t looking up on the inflation front. Except of course, in a sense they are. A worrying set of factors could see food inflation edging closer to the 11% mark than the 8% currently forecast by shifty-eyed economists, viz, mainly, the 80-90% increase in the price of white and yellow maize over the past year, the 30% increase in fuel in the last year, recent cuts notwithstanding, and the growing weakness of the dear old ZAR, currently messing about at the R8.05/$ level, with which we purchase our imported yellow maize, can you see where this is going? And while inflation favours retailers, as we all know, a vast underclass of poor people who can’t afford anything in inflationary times doesn’t favour anyone. That said, inflation is currently expected to hit around 5.2% in the final quarter of this year and peak at around 6.3% in the first quarter of 2012, but with things the way they are globally, don’t bet on it.
Comment: Hell, this is complicated. But suggestive of a wait and see approach, if that isn’t too much of a cop-out.