Today’s post by Sinead Morrow shows that 8-digit Consumer Price Index (CPI) inflation data for South Africa shows a positive skewness on average, indicating that while most items experience moderate price changes, a smaller number of items have large price increases that pull the average upward. A high standard deviation suggests wide variation in price movements across individual products, reflecting diverse inflationary pressures within the economy. As discussed in our paper on the inflation targeting debate this impacts assessments of the appropriateness of policy settings, given the importance of supply shocks in the determination of inflation in South Africa.
