Food price inflation should peak at the end of this month, while South Africa’s core inflation will continue to rise into early next year before dropping back.
This is the prediction of Miyelani Mulalek, macroeconomics researcher at Absa, writing in the bank’s quarterly perspectives for the final quarter of this year.
The figures will be closely watched by poultry producers hoping for an earlier implementation of anti-dumping duties than August next year. The duties were approved but suspended for a year last August, on the basis that they might contribute to rising food prices.
However, Trade, Industry and Competition minister Ebrahim Patel said he might consider applying the duties earlier if food inflation dropped back. In this regard, the Absa prediction is not particularly encouraging.
According to a report in Businesstech, Absa’s expectation is that food and fuel inflation will abate about midway through 2023. Pricing pressure is expected to remain elevated until the end of the year, before slowly dropping back. Absa predicts that food inflation should top out in November at 12.1%, but core CPI will continue to rise into early 2023.
The bank’s researchers found that, while headline CPI inflation peaked at 7.8% in July, the descent back into the Reserve Bank’s target range of 3%-6% could take some time.
