Picture: 123RF/lculig
Picture: 123RF/lculig

In this edition of the Business Day Spotlight, we review the economics news of the week, highlighting new inflation data. 

Host Mudiwa Gavaza is joined by Frederich Kirsten, an economics lecturer and researcher at the University of Johannesburg. 

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The conversation begins with Kirsten explaining the inflation figures released by national statistical service, Stats SA, earlier this week. 

Consumer inflation, as measured by the consumer price index (CPI), rose in July, exceeding economists’ forecasts as lockdown measures eased.

Inflation, as measured by the annual change in CPI, accelerated 3.2% year on year in July from 2.2% previously, marking the first time the inflation print is within the SA Reserve Bank’s 3%-6% target band since April. This is the highest jump since 2016 and has been attributed mainly to increases in fuel prices and municipality tariffs. 

Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI
Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI

Kirsten says inflation is a good indicator that economic activity is actually on the rise as a result of loosening lockdown restrictions. But in the long run, this could have a negative effect on the poor in society if not managed properly. 

As an economic policy researcher, Kirsten says the government's response to Covid-19 has been quite good. The issue now is implementing policy reforms, already an issue before the pandemic, to foster growth. Without the policy reforms spoken about repeatedly by the country's finance minister, it may be years before SA can recover to pre-Covid-19 levels. 

The discussion also focuses on the effect of Covid-19 on the middle class, economic inequality, other indicators that Kirsten is paying attention to, policy reforms needed to get the country moving forward, pressures facing consumers and an outlook for the coming months

For more episodes, click here.

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 Business Day Spotlight is a MultimediaLIVE production.

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