Aug 26, 2010

Inflation in South Africa

Jesse piqued my interest in this post:
Workers are asking for an 8.5% increase in pay across the board, and the government has said it would only find 7.7% to be reasonable, as it feels anything higher would put a strain on government funds. [...]

The argument made by union leaders, SACP Deputy General Jeremy Cronin, and others is that if South Africa can spend well over 1 billion Rand on the World Cup, why can’t it give a moderate increase that matches historical inflation rates? Why build super-stadiums that may go unused when you can build better housing and improve schools and hospital facilities? I don’t understand much about the inflation of the Rand, nor am I an economist in any sense, but I do understand that inflation matters, as it effects the cost of items and the value of currency. Many historically disadvantaged black South Africans are making much less then their management is regardless of inflation being a factor, and almost 3 or 4 times less then white workers. In the end it all comes down to a system built on integrity vs a system based on patronage.
I got to wondering...what is the annual inflation rate in South Africa? Bloomberg says:
South African inflation slowed more than analysts expected in July, reaching 3.7 percent, adding to speculation the central bank will cut its benchmark interest rate for a second time this year.

Inflation eased from 4.2 percent in June, the Pretoria- based statistics office said on its website today. The median estimate of 18 economists surveyed by Bloomberg was 4 percent. Prices rose 0.6 percent in the month.
Here's a chart (source—interesting place).You can probably imagine my thoughts on this strike. I've been trying to avoid a long rant; suffice to say I'm deeply cynical. But here's a question answered.

2 comments:

  1. Thanks for the repost Russell..

    I'm not cynical yet about the strike, but boy was I pissed when I heard that the hospital pharmacy staff just walked out and left many patients needing their meds stranded with no choice but to rush to their local chemist and buy them.. BUY otherwise FREE ARVS. Luckily we managed to convince the local hospital to give us the ARV's for our clients who needed refills and spent most of Friday dispensing refills via our office. I think both sides need to come to the table and agree on a reasonable offer and a framework for grievances to prevent these kind of strikes from crippling the economy and hurting the public yet again.

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  2. Good for you! I agree that some kind of compromise is necessary. I also like the idea of some kind of backstop to keep essential life-saving services running in the event of a strike.

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