Guiding consumers since 2009

Things are getting cheaper to make

By Staff Writer

There are two main components to measuring inflation. CPI which is the Consumer Price Index measures inflation by a basket of consumer goods. The second measure is PPI or the Producer Price Index which measures 'factory gate' inflation or how much more expensive it is to make things. Like consumer inflation is coming down so is producer inflation, and the latest stats show a whopping 4.1% decrease. This means it is now getting cheaper to make goods but the question remains will these savings be passed on to the consumer by the retailers.

 

  • PPI leads CPI
  • Food prices still high
  • Retailers might profit take

 

It has been a hard year for everybody and with the high inflation environment we experienced last year the knock on effects are only now filtering through into the shops. The drastic decline in PPI indicates that goods should get cheaper in the shops in the next few months as manufacturing costs rise less fast. However retailers are needing to make up lost revenues due to the downturn and may be tempted to profit take by not passing on these slower rising increases to the consumer. The competition commission is investigating the large supermarkets so they should pass the savings to consumers but smaller retailers may not.

Interest rates have been used to control inflation and the cuts that were made in the first half of this year are now starting to manifest in the economy. Inflation appears to be coming under control and is a fitting leaving present for The Guv Tito Mboweni. His successor may take a different view regarding inflation targeting but as long as real prices don't increase beyond what they should, then the economy will do better. The important thing is to plan your budget and don't expect prices to come down. They will rise, just hopefully not as quickly as they were. So plan your budget and stick to it, we are not out of the recession yet.

Recent Articles

Featured The bank took money from my account – is this allowed?

You’ve just deposited money into your account and suddenly you see a notification from your bank. Money has been deducted from your account to pay the outstanding debt that you have with the bank. Is this allowed?

How much does it cost to draft a will?

Having a Will allows you to determine who inherits your property when you die. If you die intestate, the government will determine how to distribute your assets. Many people die intestate because they don’t know how to draft a will or are intimidated by the costs of drafting one.

Is your home correctly priced for the current market?

The property market is typically in either one of two phases, a buyers’ market or a sellers’ market. According to real estate experts, we are currently in a buyer’s market. For this reason, it is important as a seller to correctly price your house to ensure interested buyers and a valuable sale in the end.

Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Deals

Mowana Voucher Special

Price: From R1,099
When: Before 24 December 2019
Where: Johannesburg

Birchwood Hotel Christmas Gift

Price: R959
When: Between 15 December 2019 to 1 January 2020
Where: Johannesburg

Burger & Lobster Lunch in 30 Minutes Special

Price: R99
When: Mondays
Where: Cape Town