Load shedding to blame for 13.6% food inflation, says economist
Nedbank economist Isaac Matshego said the use of diesel and petrol to run generators compounded the cost of food production.
JOHANNESBURG - Economists said the latest inflation reading came as a surprise – following previous decreases in the rate.
Statistics South Africa on Wednesday announced that inflation edged higher to 7% for February as load shedding continued to add to the cost of food production.
This is the first increase in four months. The biggest contributor to the rising inflation is red-hot food prices.
Consumer inflation dropped from 7.4% to 7.2% in December 2022. It dropped again in January, down to 6.9% making it the lowest reading since last May.
READ:
- Stats SA: consumer inflation goes up by 0.1%
- Food, non-alcoholic beverages main drivers of CPI increase - Stats SA
But this time around, economists had projected it would either remain the same or continue to cool for a fourth consecutive month.
Nedbank economist Isaac Matshego said load shedding was among the factors to blame for the 13.6% rise in food inflation - which accounts for the largest portion of the total consumer inflation.
"Load shedding has compelled producers, particularly in food production, to rely on petrol and diesel to run generators which is more expensive to operate so that is adding to the cost pressures."
Econometrix economist Azar Jammine said it’s also worrying that the core inflation rate, which excludes food and fuel, also came in higher.
"That suggests that there is more to the inflationary process."
Consumers are expected to feel the pinch of the skyrocketing food prices amid other high costs of living.
