By Johannah Malogadihlare
South African political parties and trade union federations have welcomed the drop in the inflation rate, which is at its lowest in four years.
According to Statistics SA, the consumer price index dropped from 3.8% to 2.8% in November.
Although this will be a huge relief for many households, the Congress of SA Trade Unions has called for a further decrease in interest rates when the SA Reserve Bank meets on Thursday.
“Cosatu expects nothing less than a significant cut in the repo rate when the South African Reserve Bank’s Monetary Policy Committee meets on Thursday, given that inflation has been within the Reserve Bank’s target of 3% to 6% since June 2023, and is now well below the target range,” said Cosatu spokesperson Zanele Sabela.
The Democratic Alliance is also pleased about the drop.
“Considering when inflation sat at double digits, this is great news. This attests to the economic stability brought by the Government of National Unity, which has buoyed investor sentiment, strengthened the rand and our bond markets,” said DA MP Wendy Alexander.
The African National Congress said a fall in the consumer price was a positive indicator of the effectiveness of the government’s policy interventions.
“These efforts, which were prioritised during the 6th Administration and are central to the 7th Administration, have included targeted measures to stabilise network industries such as electricity, logistics and water, alongside addressing fuel prices,” said ANC spokesperson said Mahlengi Bhengu-Motsiri.
The party further said those initiatives would not only contribute to reducing inflation, but also ensure sustained economic growth and alleviate the pressures felt by South African households.
Meanwhile, ActionSA said it would continue to urge the government to implement bold economic reforms to mitigate the persistent financial distress experienced by South African households despite the easing of food prices.
The SA Reserve Bank is expected to cut the interest rate by 25 basis points.
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