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Sarb Rate Hikes Appear To Be Working to Control Inflation

Food inflation in South Africa will need to be controlled in the coming months in order to slow consumer price inflation further. In November, the country’s CPI fell to 7.4% from 7.6% the previous month.

However, food and transportation inflation remain alarmingly high, with year-on-year increases of 12.5% and 15.3%, respectively. Bread and cereal would have been 20% cheaper exactly a year ago.

According to Patrick Kelly, chief director of Stats SA, these are the primary drivers of food inflation.

“This rising trend is primarily driven by bread and cereal product inflation, which reached 19.9% in November, up from 19.5% in October and significantly higher than the modest 2.2% recorded in November 2021,” Kelly said.

Kevin Lings, chief economist at Stanlib, stated that global developments had an impact on the country’s food inflation.

“International food prices must fall in order to bring South Africa’s food inflation under control.
Fortunately, that appears to have occurred, as global food inflation has dropped significantly in recent months “.