With South Africa’s petrol price set to reach record levels in July, inflation is expected to surpass the 7% range, says Himal Parbhoo, chief executive of FNB Retail Cash Investments.
The government said Monday that it will end a temporary reduction in the fuel levy in August as it announced a 10.6% increase in the petrol price, Bloomberg reported.
“To successfully save, consumers need to outperform inflation. When returns are lower than there is an increase in the cost of living, wealth is working backwards as capital balances will be able to buy less. Increasing fuel prices, means higher returns need to be achieved for wealth to maintain or increase in value.” With CPI reading 6.5% in May, savers need to ensure their money is growing at a higher rate, Parbhoo said.
“They must use their short-term savings account and money market account to cater for higher prices of goods and services instead of tapping into their long-term investments. It is important for people to consider smart changes can be made in how they spend their money”.
On the consumer front, the latest update shows the 2Q2022 FNB/BER Consumer Confidence Index remained on the downside for the second consecutive quarter signalling a potential contraction in consumer spending in the medium term. The 2Q2022 CCI dropped sharply to -25 points following a decrease to -13 index points in 1Q2022.
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