South Africans seeking respite from high inflation and looming price increases should consider going vegan, drinking less alcohol and avoiding bread, according to Bank of America.
While the inflation rate held steady near the ceiling of the central bank’s target range of 3% to 6% in April, the “pain points” for annual and monthly price increases were in the costs of meat products, fats and oils and alcoholic beverages, Tatonga Rusike, BofA’s sub-Saharan Africa economist, said in a note. Increases in the prices of bread and cereals are still to come, he said.
“It is probably worthwhile to eat fruits and vegetables, at home, and be in touch with loved ones as communication costs fall,” he said.
The savings could be used to cover “less avoidable” looming fuel and electricity prices, he said. Gasoline prices that are likely to increase by about 16% in June will drive annual inflation up to 6.5% and see the rate average 6% in 2022, according to Bank of America estimates.
South Africa’s central bank revised its domestic food price inflation forecast for this year to 6.6% from 6.1% on Thursday, when it delivered its biggest interest-rate hike in more than six years. Its estimates show price pressures are becoming more acute, with inflation now seen peaking at 6.3% in the second quarter of this year and only returning to 4.5% — the midpoint point of the target range at which it prefers to anchor expectations — in the final quarter of 2024.