Johannesburg, 23 January 2019 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the easing of the Consumer Price Index (CPI) , with the numbers moving further away from the upper band of the South African Reserve Bank’s (SARB) inflation target.
According to Statistics South Africa (Stats SA) data, the annual consumer price inflation eased from 5.2 percent in November 2018 to 4.5 percent in December 2018. The month-on-month movement in the CPI was 0.2 percent.
Speaking after the release of the figures, SEIFSA Economist Marique Kruger said the slowdown in the prices of goods and services is a welcome relief for embattled domestic consumers who have been facing a number of headwinds, including tight credit conditions and the task of keeping their credit accounts in good standing.
“The lower CPI augurs well for over-indebted consumers as it will generally reduce pressure, thus enabling households to afford basic needs, while also enhancing their ability to service their debt obligations,” said Ms Kruger.
She added that increased spending against the backdrop of lower inflation generally augurs well for businesses in the manufacturing sector, including its Metals and Engineering (M&E) cluster of industries. This is the case especially given that demand for M&E intermediate products is usually driven by demand for final consumer goods produced.