Economists are anticipating a decline in the headline consumer price inflation (CPI) due to base effects from fuel inflation and a reduction in food and non-alcoholic beverages’ inflation.
Retail sales figures are also expected to decline due to the effects of the third wave of the coronavirus which saw tighter lockdown restrictions.
Their forecasts come as Statistics South Africa prepares to release the June and July numbers for retail sales and inflation.
Economist at Econometrix, Laura Campbell, says the looting that took place in July could lead to a shock in the supply which may push up inflation in the short term.
“We’re expecting that the headline CPI inflation rate will have declined in July compared with June, this will mainly be a decline in the fuel inflation rate as the rise in fuel prices in July 2021 was much lower than the record increase witnessed in July last year. Weak demand in the domestic economy will have also limited the extent to which retailers can pass cost increases onto consumers.”
Absa anticipates retail sales to fall by 1,8% in June. Absa Economist Miyelani Maluleke explains.
“And the big issue here is that you will remember that in June we were starting to see more and more evidence that the third wave of COVID-19 infections was worsening, and what happened on the back of that is that people lost some confidence. They were not going to engage in economic activity as much as, so we’re expecting a small fall on a month-to-month basis, but on a year-on-year basis, the growth rate is going to look positive.”
Statistics South Africa shows consumer inflation rate slowed to 4.9% in June:
