South Africa: Who Benefits From Inflation-Targeting?

analysis

On Wednesday last week, Statistics South Africa (StatsSA) released the June consumer price index numbers. Headline inflation surprised the market by only increasing 5.5% year-on-year. Analysts are talking about monetary policy remaining looser for longer, while estate agents are sharpening their smiles. Some economists agree with the inflation-targeting policy and framework, others vehemently oppose it. What should be beyond debate is that the CPI 'basket' only has relevance to the richest 10% (or maybe 20%) of households. By PAUL BERKOWITZ.

The graph below represents the official inflation rate, from January 2009 to June 2013, derived from StatsSA's headline CPI figures. The shaded band refers to the Reserve Bank's inflation target of between 3% and 6%.

...

AllAfrica publishes around 400 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.