ZANDILE MAKHOBA: Climate change turns up the heat on inflation
High interest rates are adding to the temperatures and are being felt all over the economy
It is hot in South Africa. The hottest it has been in decades. The impact of El Niño is an uncontrollable factor that the country is dealing with and comes as a blow to the consumer inflation outlook.
The heat is disrupting agriculture, after weak production in 2023. Food prices have been a major contributor to the stubborn CPI (consumer price index) inflation rate. In the February report, food prices contributed a notable 1.1% of overall inflation. With the prevailing weather conditions, it suggests that food prices will remain on the rise for much of the year. CPI inflation reached 5.6% in February 2024, the fifth consecutive reading above 5.0%, showing amber on the ceiling of the Reserve Bank’s target range...
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