Today's Labour News

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AbsaEngineering News reports that Absa Corporate and Investment Banking in its 'South Africa Third Quarter 2022 Quarterly Perspectives', says it expects food inflation to rise from 8.6% to a peak of 11.5% in November, before falling back to 4.8% by the end of 2023.

"We have seen sharp increases in food price inflation, but crop prices have started to ease, which is an encouraging sign. However, owing to a bit of lag, in the near term, food price inflation will push higher than what it currently is," Absa economist Miyelani Maluleke explained last week. The bank expects headline CPI inflation to peak at a lower level compared with many advanced and developing economies, at 7.9% year-on-year in October. It is then expected to track sideways into the first quarter of 2023, before softening to end 2023 at 4.7%. Higher consumer inflation has sparked higher inflation expectations and strengthened workers’ wage demands, but Absa does not expect a wage-price spiral in SA, given the weakness of labour markets in general. “Bringing inflation expectations back to the 4.5% handle will require the SARB to tighten monetary policy more. We expect to see more hikes of about 75 basis points during the September and November meetings and we have pencilled in a further 50 basis points of hikes to take the repo rate to 7.5%,” said Maluleke.

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