There is a high degree of dispersion across price categories that comprise the consumer price basket in South Africa. There are a many products and services whose prices have persistently grown at above the mid-point of the inflation target, even though the mean of consumer prices is the near the mid-point of the target range. As we showed in our inflation targeting paper, the distribution of price changes matters for price setting behaviour and therefore has implications for the optimal inflation target and the appropriate approach to inflation targeting. Yet this is not something the SARB reports on or assesses in its policy analysis.
Compiled by Aidan Horn and Oliver Guest
