The Economy What’s up with inflation?
As you know, consumer price inflation ticked up for the month of March to +7.1%, or 0.1% month-on-month from February. What gives? Food price inflation was the big contributor, at +2.4%, or just over a third, and this, in turn, was driven by higher domestic production costs and rand weakness, which accounted for about half of this, over the 12 months in question. Domestic production costs, breaking those down, are made up of a bundle of factors, particularly load shedding and other input costs, including transport. Hence the disconnect between the decline in food prices globally and our own situation. And spare a thought for the poor farmers, with their three o’ clock teas on the stoep and their new Hiluxes. Because just as they poised to make a killing selling rand-produced crops for US dollars, food prices go down -11% for the month of March. And food sold back home, of course is sold for ailing rands.
Comment: And while food price inflation is set to moderate later this year, who knows which way the rand will blow in the whimsical breezes of the global economy?