The first two expenditure deciles are currently experiencing an inflation rate that is above the upper limit of Sarb’s inflation target (6%). The above illustrates that the poorest expenditure decile (the first expenditure decile) is currently facing a significantly higher inflation rate of 6.6%, in comparison to the national figure of 5%.Įxtending this further, the first three expenditure deciles (or poorest 30%, and where unemployment is highest) are all facing an inflation rate that is appreciably above that reported for the country as whole. Source: Stats SA – Consumer price index September 2021 The figure below illustrates the inflation rate per expenditure decile. However, scratch a little deeper into how the inflation rate affects the different economic groups (such as rich and poor) and we see a more concerning state of affairs. On the surface, it appears as if inflation is currently under control and the Sarb is implementing its inflation target with expert precision. Although this is above the levels we experienced last year, it still sits well within the South African Reserve Bank (Sarb) inflation target of between 3% and 6%. This article, in a similar manner, will unpack the present state of consumer prices and indicate where the largest burden lies and how this impacts the country not only now, but into the future as well.Īt the time of writing, the latest headline inflation rate was 5% (September 2021). Read: Youth unemployment: Two knock-on effects to expect

In a recent article published by Moneyweb, we unpacked the current youth unemployment crisis and discussed some of the potential knock-on effects that can be caused by having a disproportionately large portion of the youth excluded from participating in the economy – in other words, unemployed.

The challenges the South African economy has faced in the aftermath of the lockdowns implemented in response to the Covid pandemic are well documented and have put even more pressure on an already stuttering economy.

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