Durban - Trade union Uasa has raised concern over the increase in South Africa’s inflation, which rose slightly from 4.7% in July to 4.8% in August.
Uasa spokesperson Abigail Moyo said workers battling to balance the cost of living against their shrinking incomes must face disappointment as annual consumer inflation slightly increased to 4.8% in August from 4.7% in July.
“The previous four consecutive months of decline made little difference as increased fuel prices, electricity and municipal tariff rates counteracted it.”
Moyo added that parents and other consumers would feel the financial stress building up to the festive season and the back-to-school rush early next year.
“The main contributors to the higher inflation rate were food and non-alcoholic beverages (increased by 8% year-on-year and contributed 1.4 percentage points); housing and utilities (increased by 5.5% year-on-year and contributed 1,3 percentage points); and miscellaneous goods and services (increased by 6.2% year-on-year and contributed 0.9 of a percentage point).
Moyo said the union was also worried about another possible fuel price increase in October.
“With a further massive fuel hike likely looming on the horizon, one can only wonder when consumers will get some relief from the financial abuse inflicted upon them by the economy.”
Koketso Mano, FNB senior economist, said given the August survey of municipal tariff increases, the major contributor, explaining nearly half of the monthly pressure, was water and other services.
“The rest of the pressure is explained by smaller contributions by other core items.
“Average fuel prices lifted by 2.2% between July and August, but fuel prices were 11.7% lower than in August 2022.”
Mano added that adjusting FNB’s forecast with this outcome suggests that headline inflation could lift to 5.5% in September.
“A weak rand and higher international oil prices resulted in a sizeable fuel price hike in September, which should shift fuel prices back into inflationary territory after recording annual deflation in the past three months. Furthermore, the undervalued rand should continue to exert upward pressure on broader imported inflation.”