20 Oct

UASA Media Release: 20 October 2021

Statement by Abigail Moyo, spokesperson of the trade union UASA:

Price increases for fuel, municipal services, meat, medical insurance, rent and new vehicles make up 61.6% of the 5% increase in the consumer price index (CPI), according to Stats SA. The CPI rate increased by 5% in September compared to a year ago; a bit higher than the 4.9% of August and also above the 4.5% the South African Reserve Bank (SARB) target.

Economists expected the higher CPI and further expect it to increase at a slower rate over the next six months. Consequently, there is therefore no need for the SARB’s Monetary Policy Committee (MPC) to increase the repo rate in November.

A closer look at September’s CPI further reveals that core CPI (CPI excluding fuel and food) showed a slight increase from 3.1% in August to 3.2% in September. Core CPI is monitored to determine whether second round price increases are passed on to consumers and revealed that fuel price increases and higher wages are mainly absorbed by retailers and are not passed on to consumers via a second-round price effect. As the SARB is more concerned about widespread increases in CPI, this should put the MPC at ease.

Despite economists’ predictions that the CPI will not severely affect the repo rate, UASA is deeply concerned about the 5% CPI increase as it puts pressure on ordinary consumers’ cost of living. Too many workers are forced to carry the weight of almost impossible financial challenges, even since before the Covid-19 pandemic struck. The “new normal” and the aligned cost of living in a challenged economy make for devastating circumstances that many just can’t overcome.

UASA urges government, businesses and industry partners to consider the needs of cash-strapped workers and investigate the prices of basic services, food and bare necessities.

For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162 .

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