Reserve Bank governor Lesetja Kganyago warns that load shedding is pushing up costs for consumers and businesses, adding pressure to inflation. The power crisis has led to supply chain disruptions, increasing manufacturers' input costs and higher prices.
In a lecture at the University of Johannesburg, Kganyago reiterated the central bank’s prediction that the country’s energy crisis would shave off two percentage points from growth this year.on growth, there is recognition and growing evidence that the country’s ongoing energy supply challenges are impacting prices as well,” he said.
In its latest Essential Food Pricing Monitoring report, the Competition Commission said retailers, processors and producers had passed on unjustified price increases on essential products such as sunflower oil and bread to consumers over the past two years. “In South Africa, food inflation has continued to surprise to the upside, despite the decelerating trend observed in global agricultural commodities,” Kganyago said on Wednesday.
Looking ahead, Kganyago said, domestic headline inflation is projected to remain elevated, returning to the target range in the third quarter of 2023 and averaging 6% for the year. The governor said the 0.2% economic growth forecast for this year, and the projected average of 1% in the following two years “is barely an expansion”.
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