News in South Africa 25th August:
1. Food expenses cut by 47%:
The latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) shows a continued rise in food items in August in South Africa – meaning less money in the pockets for consumers.
This has led to families underspending on food by a minimum of 46.8%, it said.
The August 2022 Household Affordability Index, which tracks food price data across the country, showed that the average cost of the household food Basket is R4,775.59 – up R26.72 (0.6%), from R4,748.87 in July 2022.
Year-on-year, the average basket increased by R534.47 (12.6%) to R4,775.59 in August 2022.
Data from SatsSA on Wednesday (25 August) pointed to an acceleration in South Africa’s annual inflation rate accelerated to 7.80% in July 2022, from 7.40% in the previous month and above market expectations of 7.70%.
The main contributors to the spike in inflation include higher costs for transport (increased by 25% vs 20%); food and non-alcoholic beverages (9.70% vs 8.60%); housing and utilities (4% vs 5.10%) as well as miscellaneous goods and services (3.60% vs 4%), noted Adriaan Pask, CIO at PSG Wealth.
Annualised core inflation, which excludes food, non-alcoholic beverages, fuel, and energy prices, also surpassed expectations, rising to a new record high of 4.60% in July 2022, from 4.40% in the previous month.
On a monthly basis, consumer prices rose by 1.50%, following a 1.10% increase in June and above market expectations of a 1.40% rise.
“We remain concerned about second-round effects from elevated food and fuel inflation, which could be exacerbated by import price pressures as the rand has weakened against the dollar. These core price pressures, along with the continued normalisation in services inflation, should support the rise in core inflation, the economist said.
2. New car price lagging:
Surprisingly, new car price increases in South Africa continue to lag the country’s rising inflation rate.
The latest TransUnion South Africa Vehicle Pricing Index (VPI) reveals that the rate of change in new vehicle prices declined to 3.9% in the second quarter of this year from 6% in the first quarter.
However, the rate of change in used vehicle prices soared to 8.3% from 4.9% in the same period to continue the trend of used vehicles becoming relatively more expensive.
Vehicle Pricing Index Q2, 2022
Statistics SA reported on Wednesday that headline consumer inflation accelerated to 7.8% in July, the highest level since May 2009, from 7.4% in June.
Factors behind sales slowdown
Naamsa CEO Mikel Mabasa attributed the slowdown in momentum in new vehicle sales between 2022’s first and second quarters to the impact of the severe floods in KwaZulu-Natal on vehicle production and sales, logistical import and export challenges at the Durban port, and a weak economic climate.
ammine cited increased inflation and declining affordability because of higher interest rates as a major factor in the loss of momentum.
He said the first quarter of each year “contains that spurt of new vehicle sales” and seasonality could also be a factor in the decline in sales between the two quarters.
“But one of the reasons why year-on-year new vehicle sales are holding up surprisingly well is that vehicle manufacturers are taking a hit on their margins to continue selling vehicles,” he said.
3. Toy market bounces back:
For the past two years, the toy industry has seen a new trend of “kidults” – toy enthusiasts who are adults – increasingly buying toys as a coping mechanism during difficult times.
According to Toys R Us, toys bought by adults for themselves are surging in popularity as people between the ages of 19 and 29 turn to their childhood toys for comfort.
Toy World Magazine found that in the past year alone, about a quarter of all toy sales have gone to young adults.
“This year is set to be another bumper year for the industry as the traditional toy market bounces back,” said Catherine Jacoby, marketing manager at Toys R Us. “The traditional toy market is making a comeback, with ‘vintage’ trends at the forefront.”
According to Jacoby, half of all Lego toys are bought by the kidult market.
Other power brands that speak to people much older than their intended target market include Barbie, Pokémon, and Rubik’s Cube.
Right now, the most popular kidult toys are a mixture of vintage, the 90s, and toys inspired by current TV shows and movie franchises.
They include wind-up function toys such as Stretch Armstrong, Hotwheels, Pez candy, and Star Wars; GI Joe, Turtles, Rubik’s Cube, Thundercats; and Tamagotchi, Pokémon, Polly Pocket, Barbie, Hotwheels and Power Rangers.
“Movie franchises and TV shows create sought-after memorabilia merchandise and collectables and are on the rise with a number of franchises being released this year,” said Jacoby.
“Blockbusters always contribute to the popularity of collectables, and we can expect to see many of these during 2022 and 2023.”
4. Sanitiser price gouging:
Questions are being asked about the status of the Competition Tribunal case against companies accused of excessive pricing of hand sanitiser – which is still pending after 18 months.
The Special Investigating Unit handed its final report on the matter to President Cyril Ramaphosa in early July.
Ramaphosa has not yet made that report public or even commented on it.
Several companies were found to be overcharging government and government departments millions for hand sanitiser during the Covid-19 pandemic.
Ten months later the judgment is still awaited. Nearly two years have passed since the first two Covid-19-related public procurement cases were referred to the tribunal for prosecution, as the commission described them at the time.
As a result, Tembinkosi Bonakele, the Competition Commissioner, said the commission was “reprioritising its work to ensure that it is able to deter excessive pricing in the public sector and to hold the companies involved in the worst price abuses accountable.”
5. 14 days to address demands:
Protesting workers have given the government 14 working days to address their demands around the economic and energy crises plaguing South Africans.
Protesters on Wednesday threatened further protests if nothing was done.
With some placards saying “Ramaphosa will be our death”, thousands of protesting workers, including the young and old, painted Pretoria red as they marched with their placards in the air from Burgers Park to the Union Buildings.
Some who said the “no work, no pay policy” applied at their workplaces said it was a sacrifice they were willing to make.
The workers said it did not make sense why the government was refusing to increase salaries for workers.
They are demanding, among others, the lowering of food, fuel and electricity prices, lower interest rates, salary increases for public servants and for Eskom not be privatised.
Sanoco Tshwane regional chairperson Abraham Mashishi said working people are suffering.
“Our brothers and sisters have stress because of nonpayment. If you are failing to address the issues of the working class forget about 2024,” he said.
Tinyiko Ntini, central committee member of the SA Communist Party (SACP) said it can’t be that when workers demand what is rightfully theirs, they are told there is no money.
The deputy president of Cosatu, Mike Shingange, said they are fighting for a decent work rate.
“We are drowning in debt. We are unable to even transport ourselves to work because the take-home pay at month end is not enough because of the skyrocketing petrol price which makes taxis unaffordable and buses not available.
“We are here to demand that there must be a fuel price cap to allow the working class to go to work and the unemployed working class to be able to transport themselves when they go look for work. You can’t grow the economy by suffocating the working class for making a living for themselves,” he said.
All information sourced from articles posted by: BusinessTech, Moneyweb, Business Insider, Daily Maverick, and TimesLive.
