Previously
retail inflation was calculated using Consumer Price Index (CPI) data. The advantage is
that this set of data becomes available one or two months ahead of retail sales data. The
direction of retail inflation, as measured using the CPI data is reliable, but its level,
particularly for semi-durable and durable goods, is too high. This is so, because the CPI
data are not sufficiently detailed to measure inflation for all the components of retail
sales.
It has now been decided to use the retail sales data for real (unit) and nominal
(turnover) sales to derive retail inflation rates. This provides a complete and detailed
coverage of inflation in retailing. To the extent that the retail sales data are out of
date, CPI data will be used to measure, or where necessary, estimate retail inflation for
the last one or two months.
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| Summary : |
- Consumer market (CPI) inflation declined slightly
from 7.1% in November 2000 to 7.0% in December 2000. Headline CPI rose 0.3%
month-on-month, driven by increases in prices for housing, household operation and
personal care.
- Overall retail inflation edged down to 4.1% in
November 2000, and an estimated 4.3% in December.
- Non-durable retail inflation declined in November,
primarily due to lower food prices. Non-durable inflation declined in December to below
7%.
- Semi-durable retail inflation increased somewhat in
November, mainly owing to higher ladies’ clothing inflation. Estimated inflation in
December was close to 1%.
- Durable retail inflation showed a slight decline in
November, but probably rose significantly in December, close to 2%, due to higher
furniture inflation.
- Petrol inflation declined in December, but services
inflation showed another increase.
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- Lower inflation of non-durable goods will benefit low-income
groups.
- During last year, low-income groups suffered from rising
transport costs, food prices and household fuel prices. However, these trends are likely
to be reversed in 2001, resulting in some relief for these groups.
- Consumers will be hard hit this year by the dramatic
increase in medical aid premiums of up to 30%, which resulted in doctors’ fees
increasing by around 31%. Combined with rising education costs, this will lead to an
increase in the inflation rate of services. High-income groups tend to spend a greater
proportion of their income on services, and will therefore be more adversely affected by
these changes.
- The decline in petrol prices is expected to continue and
will contribute to an increase in the income that households have available for spending
on consumer goods.
- Retail inflation will decline further during the next year,
in sympathy with general inflation.
- Non-durable inflation, in particular, will continue its
decline due to lower food inflation.
- Semi-durable and durable inflation rates will not decline
much further and will remain low.
- Services inflation is unlikely to fall much.
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