South Africa’s inflation rate – including food inflation – is rising, and consumer confidence is dropping rapidly, recent statistical surveys show.
But there’s light at the end of the tunnel, says the Bureau for Economic Research(BER) – food prices should peak this year and the long-term food price outlook is more favourable.
In the short term, however, problems remain. Inflation, as measured by the Consumer Price Index (CPI), rose to 7% in February, from 6.9% in January, ending a three-month drop. Statistics SA says the increase was driven by higher food prices – food and non-alcoholic beverages rose 13.6% over the year to February, up from 13.4% in January.
While food inflation is dropping globally, according to the world Food Price Index, South Africa’s food inflation has reached a 14-year high.
“Meat inflation continues to accelerate, reaching 11,4% in February from 11,2% in January. This is the highest annual increase for meat since February 2018 (also 11,4%),” StatsSA reported.
South Africa’s electricity woes and the rising cost of living are behind the plunge in consumer confidence to near-record lows.
The latest FNB/BER Consumer Confidence Index showed consumer confidence down at -23 in the first quarter of 2023, the third lowest reading since the country became a democracy in 1994. Economists said the plunge indicated extreme concern about South Africa’s economic prospects and their household finances.
South Africa’s troubles, however, are not nearly as bad as those facing consumers in neighbouring Zimbabwe, which has the world’s highest inflation rate.
Farmer’s Weekly reported that the World Bank kept Zimbabwe top of the list in February 2023, despite inflation there dropping to 92.3% from 229.8% in January. It reached an 18-month high of 285% in August 2022.