How are global shocks impacting a country like South Africa and how should policy respond to them? These are the questions I will try to unpack today. Where we stand now Higher energy and other commodity prices, supply bottlenecks as well as insufficient inventories are some of the factors that drove inflation sharply higher in 2021 and early 2022.
In recent months, headline inflation has started to come down in most jurisdictions, largely reflecting lower energy prices. By contrast, core inflation rates remain sticky. The lagged effects of energy, food and other cost increases are still feeding through to wages, services prices and many final prices.