South Africa’s inflation reached a 13-year high in June. Most of the commodities with the sharpest price hikes are basic necessities like bread, electricity, oil, fuel and public transport. The Reserve Bank’s Governor Lesetja Kganyago just announced yet another increase in interest rates (figure to be confirmed). South Africa has an inflation targeting monetary policy, however, as we have seen these price increases aren’t driven by just demand, there are external factors too. Today we ask, is inflation targeting still in the interest of South Africans and how should the state use its power over administered pricing correctly to respond to inflation?
Guest: Chris Malikane, Associate Professor of Economics at the School of Economics and Finance at Wits University as well as Dawie Roodt, Director and Chief Economist at the Efficient Group