‘Bleak’ consumer expenditure remains despite lower inflation
The Pietermaritzburg
Economic Justice and Dignity Group says while the slight decline in inflation is a good sign, consumer
spending patterns remain bleak.
The Consumer Price Index slowed for a second consecutive month in April, easing from 5.3 % in March to 5.2%.
The group's Mervyn Abrahams says some people are continuing to rely more on debt and credit cards.
"In the middle class that the reliance on debt of using credit cards, falling behind on mortgages and enquiring instalments are continuing to increase.
Abrahams says he doesn't think households will feel the impact of the decrease in inflation, as other food prices are already unaffordable.
ALSO READ: Lower inflation won’t lead to immediate rate cut, predicts economist
He says the price of the average food basket stands at over R5000, while the national minimum wage for the month of April was R4600...
"These CPI figures are small in comparison to the mismatch between household income and expenditure on basic services. We do not expect that it would have any major impact on households until we get inflation down to 1 or 2%. Only then will lower South Africans begin to feel the impact in a positive manner."
Abrahams says lower-income citizens continue to eat less nutritious food.
"These trends continue and unfortunately will continue even though we have seen a 0,05% drop in food inflation and a 0,01% drop in overall inflation in the month of May."
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