Fuel prices rose 33.9% in a year. Expect spiking inflation - and interest rates
Fuel prices are 33.9% higher than 12 months ago, fueling price inflation of a number of goods
Expect higher interest rates in response
Food prices and transport costs far outstrip measured inflation; expect upward pressure on wages
At midnight on Tuesday, punch-drunk consumers were hit with massive fuel price hikes that could have catastrophic economic consequences for South Africa.
A litre of petrol went up by R1.21 per litre to R19.50 (inland) while diesel spiked by R1.48 a litre to R17.23.
The announcement was scheduled for 28 October but only came 15 minutes before local government election polls closed on Monday, 1 November.
Refilwe Moloto interviewed Stanlib Chief Economist Kevin Lings about the skyrocketing cost of living (scroll up to listen).
The prices have been moving up for a while… it’s now 33.9% higher than a year ago… 12 months ago we didn’t feel the effects, because we were still in lockdown…Kevin Lings, Chief Economist - Stanlib Asset Management
… a huge amount of goods in South Africa is transported by road. That will put upward pressure on a range of goods… feeding into a broader price effect, and obviously, the Reserve Bank would have to respond through higher interest rates…Kevin Lings, Chief Economist - Stanlib Asset Management
There’s a difference between measured inflation and experienced inflation… Food inflation is 7% and transport is going to be considerably higher than that… It will put upward pressure on wages…Kevin Lings, Chief Economist - Stanlib Asset Management
Source : https://www.123rf.com/photo_81519200_open-empty-leather-wallet-no-money-in-pocket-empty.html?vti=mxg894698shohvpysa-1-11