Inflation hits 3.8% which marks a turning point for South Africa's economy. File picture: Markus Spiske via Unsplash
Political parties and unions have welcomed the the latest inflation data from Statistics South Africa (Stats SA) which reveals a decrease in consumer price inflation (CPI), dropping from 4.4% in August to 3.8% in September.
This decline — the lowest level since March 2021 — has prompted responses from various political parties and labour unions, highlighting differing perspectives on the causes and implications of the change.
ActionSA has welcomed the latest inflation figures, attributing the decline primarily to the South African Reserve Bank's (Sarb’s) disciplined monetary policy.
“This achievement demonstrates the effectiveness of Sarb’s disciplined approach to monetary policy during a time of ongoing economic uncertainty,” Alan Beesley, ActionSA Member of Parliament said.
He emphasised that the lower inflation rate could pave the way for further interest rate reductions, providing much-needed relief to South Africa's poorest citizens.
Beesley also criticised the government of national unity (GNU) for attempting to take credit for the improved inflation figures.
“It is Sarb’s austere and responsible monetary policy that has successfully navigated South Africa through tough economic conditions.”
He called for greater transparency and accountability in the government's economic role, urging citizens to recognise that the inflation relief stems from effective monetary policy rather than political grandstanding.
Conversely, the Economic Freedom Fighters (EFF) welcomed the decline in CPI but criticised Sarb’s monetary policies as inadequate and outdated.
EFF spokesperson Leigh-Ann Mathys argued that the current inflationary pressures are systemic and not driven by demand.
“The inflation figures released today further validate our position that the high interest rate regime was misguided from the beginning,” she said.
Mathys contended that the Sarb’s reliance on high interest rates has contributed to economic stagnation and exacerbated unemployment and inequality.
She urged Sarb to adopt a “more progressive, responsive, and inclusive approach,” highlighting that the recent 25 basis point cut in the repo rate was insufficient given the economic challenges facing many South Africans.
The Congress of South African Trade Unions (Cosatu) expressed appreciation for the decline in inflation, viewing it as a much-needed relief for workers burdened by debt and rising living costs.
Matthew Parks, Cosatu Parliamentary Coordinator, noted, “This will provide invaluable comfort to millions of workers.”
However, he urged Sarb to act quickly to further reduce the repo rate, recommending a 50-basis point cut in the upcoming Monetary Policy Meeting.
Parks also called on the government to enhance interventions supporting state-owned enterprises like Eskom and Transnet, arguing that such measures are crucial for shielding consumers from inflationary pressures.
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