BRIAN KANTOR: It’s easier to see what’s up with predictably low inflation
But one important real price shows no sign of stabilising: the real value of the rand
When it comes to inflation what really matters is real prices — that is, whether some good or service has become relatively more or less expensive than others. Relative prices can change a great deal, even as prices in general rise consistently or remain largely unchanged.
For example, the prices of food and nonalcoholic beverages in SA have risen much faster than the price of clothing. The prices of goods and services are on average 31 times higher now than in 1980 (weighted by their importance to household budget), while clothing and footwear prices are up a mere eight times. Food prices are 43 times higher than in 1980, making food about 5.4 times more expensive relative to clothes, and clothing that much cheaper than food.