The Don Consultancy Group (DCG) Chief Economist Mr Chifi Mhango says: “inflation rate will remain elevated domestically and globally as supply chain bottlenecks persist amid the war in Ukraine as food and transport cost surge.” 

Statistics South Africa (StatsSA) data released today shows annual consumer price inflation was 5.9% in March 2022, rising from 5.7% as registered in February 2022. The consumer price index increased by 1.0% month-on-month in March 2022. The main contributors to the 5.9% annual inflation rate were food and non-alcoholic beverages; housing and utilities; transport; and miscellaneous goods and service, with increases of 6.2%, 4.8%, 15.7% and 3.2% respectively. 

“The current inflation rate of 5.9% in South Africa is just 0.1% below the upper target range of the South Africa Reserve Bank inflation rate, thus marking the 11th consecutive month in which annual inflation has been higher than the midpoint of the South African Reserve Bank's target range of between 3% and 6%. We project a rough ride for South African consumers, with prices for basic food items surging further if not managed.” elaborated Mr Mhango 

Mr Mhango also noted a similar concerning picture globally, as inflation rates continue to rise across various countries and regions as expected, considering the projected impact of the war in Ukraine on global supply chains. The annual inflation rate in the USA rose to 8.5% in March of 2022, the highest in 40 years, from 7.9% in February. Energy prices increased 32%, as Russia’s invasion of Ukraine pushed crude oil prices higher. Also, food prices surged to 8.8%, the highest in 40 years also”. 

“In the Euro Area, annual inflation rate surged to an all-time high of 7.5% in March of 2022 compared to 5.9% in February mainly attributed to the impact of the war in Ukraine, with sanctions on Russia pushing fuel and natural gas prices to record high levels. The inflation rate is 3 times more above the ECB target of 2%.” Mr Mhango noted further 

The DCG Chief Economist, Mr Chifi Mhango also provided a view on some of the BRICS countries based on National Statistics data, which shows that: “Brazil annual inflation rate surging to 11.3% in March of 2022 from 10.54% in February, and marking the seventh consecutive month of double-digit inflation rates and the highest in 19 years. In India, annual inflation rate increased to 6.95% in March of 2022, the highest since October of 2020. Food inflation accelerated for a 6th straight month to 7.68%, a new high since November of 2020. The central bank of India recently revised upwards its inflation forecast to 5.7% for financial year 2022-2023 from 5.3%, citing surging commodity prices. While in China, annual inflation rate rose to a three-month high of 1.5% in March 2022 from 0.9% in the previous two months.” 

“Going forward, global inflation is expected to peak further with the war in Ukraine being far from over, as supply chain bottlenecks persist and consumer demand remain elevated, hence likely to weigh on the consumer goods prices for longer.” concluded Mr Mhango