Inflation likely peaked and will ease: economist

Inflation likely peaked and will ease: economist

JOHANNESBURG – Economists say inflation has likely peaked and will ease slightly in the coming months.

Statistics South Africa reported consumer inflation at 7.8 percent on Wednesday — the highest in 13 years.

WATCH: Inflation hits 13-year high

July inflation was driven by higher transport costs, which increased by 25 percent year-on-year.

Food and non-alcoholic beverage prices increased by 9.7 percent year-on-year.

READ: Competition Commission finds ‘opportunistic pricing’ for oil and bread

The numbers will not only fuel the wage demands by unions but will also keep the Reserve Bank on its rate hike cycle.

“Inflation will still be fairly high over the next medium term. But, we are set to see an easing of the prices because of the lower fuel prices expected, unfortunately though, interest rate hikes are likely to continue until next year where the SARB my hold rates and maybe cut at the end of 2023,” independent economist Elize Kruger said.

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