An investigation of the causes of South Africa’s rising inflation from 2007– 2023

Abstract

The paper investigates the causes of South Africa’s inflation from 2007-2023. Thereport finds that labour costs, import prices and the exchanges rate are positivedeterminants of inflation. The report finds that labour unit cost is still the biggestcontributor to inflation. The report futher finds that inflation targeting must beemployed together with non-monetary policy measures to be fully effective. The reportrecommends fiscal policy measures such govement price control and policy measures tocontrol wage increases. The report futher recommends that the SARB must be moretransparent in communicating its measures on how it will deal with inflation in thefuture this will enable the Reserve Bank to better control inflation expectations