Inflation drop temporary, says expert
Citibank Global Economist Gina Schoeman said it was too early to see what effect the Government of National Unity had had on the effect of inflation.
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JOHANNESBURG - While inflation has shown a decline, with the latest Consumer Price Index (CPI) figures falling from 3.8% to 2.8%, experts say this is temporary.
The decline is attributed to fuel and food prices, which remain lower than a year ago.
This is a sign of relief for lower-income consumers who spend a large proportion of their spending on food and fuel.
Citibank Global Economist, Gina Schoeman, explained the fluctuation of prices:
"The oil price, which is out of the control of South Africa, and then the currency, the rand, which is both a function of domestic factors but also international factors, so not completely in control of South Africa as an economy, in its own hands."
She said it was too early to see what effect the Government of National Unity had had on the effect of inflation.
"There are structural elements here that are improving. If the economy becomes more efficient under a GNU political system and naturally, efficiencies come with better reformations that have been put in place, this will have a structural improvement over the long term for South Africa’s inflation rates."