Rise in electricity tariff could spike inflation, says Reserve Bank
The Bank assumed a power-price increase of 9.7% for 2018 its in January forecast, which sees inflation accelerating to 4.8% by the end of 2019
SA’s electricity tariff increases could push the inflation rate up by 0.75 percentage point, Reserve Bank deputy governor Kuben Naidoo said. The nation’s energy regulator said last week that Eskom would be allowed to raise electricity prices 9.4% from April 1, taking the total increase to 13.8%. That’s almost 50% more than the assumption the central bank used in its latest projections for 2019, which forecast that inflation would stay below 5% in 2018. The Reserve Bank assumed a power-price increase of 9.7% for 2018 its in January forecast, which sees inflation accelerating to 4.8% by the end of 2019. The total adjustment that was granted to Eskom could add about 0.3 percentage point the rate, Naidoo said on Wednesday at a conference in Cape Town. The Reserve Bank increased its key interest rate for the first time in more than two years in November, even as the economy had just come through a recession and hasn’t expanded at more than 2% annually since 2013. It kept borrowing costs ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.