Following the COVID-19 pandemic, inflation in South Africa initially undershot the inflation target as weak demand and muted price pressures kept inflation below the Reserve Bank’s mid-point target. In the wake of the pandemic, inflation quickly picked up as a consequence of the supply chain disruptions created by economic lockdowns. The spike in global inflation in 2021 caught SARB by surprise (as it did some other central banks like the Federal Reserve). The figure by Tashen Naidoo below shows the cumulative increase in inflation since July 2017, when the SARB began emphasising a mid-point target of 4.5%. The price level is up by around 40 percent since then.
Despite a lower inflation target, the United States saw a bigger post-pandemic increase in the price level, even though the cumulative change in the US consumer price level has been slightly less over the same period.
