P e r s p e c ti v e

extract from MMS Service 22-May-02

Inflation targeting hurting the poor man    22-May-02
     
Although in the long-run successful inflation targeting is undoubtedly of great benefit to the poor man, given that his money goes further, the lower income bracket of South Africa is currently paying high prices (no pun intended) in the hope of greater disposable income in the future. Indeed, while the lower and middle income groups received the greatest tax relief in this year's budget, soaring food inflation and fuel price hikes are eating away these tax windfalls. CPI data shows food inflation soaring on the back of the lagged effect of parity.

 

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e c o n o m e t r i x 22-May-02