Let’s start with the consumer price index for January, which showed that consumer inflation slowed to 6.9% on an annual basis from 7.2% in December. That is still an elevated level and remains well outside the South African Reserve bank’s 3% to 6% target range, but at least CPI is moving in the right direction.
Prices for bread and cereals soared almost 22% in the year to January, and Sihlobo noted that this reflected “the pass-through of the price increases that food manufacturers have felt from the higher agricultural commodity prices in much of 2022”. “We have stated previously that the disruptions caused by power supply interruptions to some food processing companies, as well as the associated cost increase, all present upside risks to consumer food price inflation,” he said.
To top it all off, the Business Confidence Index compiled by the South African Chamber of Commerce and Industry fell 4.4 points to 112.9 in January, from 117.3 in December. It’s 4.1 points higher than it was in January last year, but that was when the Omicron variant was wreaking havoc.