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A shopper looks at grocery items in Johannesburg, South Africa, June 17, 2020.
Some economists are optimistic that Consumer Price Inflation (CPI) in South Africa will remain low despite uncertainty around global developments.
Stats SA says inflation held steady at 2.8% in May after rising marginally in April up from 2.7% the previous month.
The food and non-alcoholic beverages category was the only one contributing to the 0.2% monthly increase to the CPI.
Economist Dawie Roodt notes that the overall inflation print has been low for some months now, contributing to a fall in inflation expectations.
“But more importantly perhaps is that, inflation has been around 3% for quite a long period of time now. Now is perhaps the time for the Minister of Finance to reduce the inflation targets and move away from the 3 to 6% band.”
“And don’t even set the inflation target at 4%, but set it at 3%. Now it’s an absolute one. It’s a wonderful opportunity to change the inflation targets, to change it to 3% in line with what the SA Reserve Bank would like to see inflation targets to be,” adds Roodt.
