Let’s hope our belts can fit in a few ex­tra holes

CityPress - - Voices -

When Re­serve Bank gov­er­nor Le­setja Kganyago an­nounced the in­ter­est rate would go up on Thurs­day, it was sim­ply an af­fir­ma­tion that things were go­ing to get worse be­fore they could get bet­ter.

Since the last quar­ter of 2015, the rand lost sig­nif­i­cant ground, wip­ing out any ben­e­fit from drop­ping oil prices, while the global mar­ket for just about ev­ery­thing kept slump­ing.

While Thurs­day’s hike will be felt im­me­di­ately by those with mort­gages and other debt bur­dens, the bit­ter medicine will not con­tain the dis­ease of in­fla­tion any­time soon.

In­fla­tion is pro­jected to peak at 7.8%, but that un­der­states the food in­fla­tion ex­ac­er­bat­ing the di­vide be­tween the poor and middle class.

The price of maize is rock­et­ing be­cause of the drought, which has af­fected farm­ers coun­try­wide – and those ex­pen­sive mealies will find their way only to the few plates that can af­ford them.

The de­ci­sion was the first of many that will keep jar­ring us into a new nor­mal dic­tated by global events. The rand, along with the cur­ren­cies of much of the de­vel­op­ing world, was go­ing to hurt no mat­ter what, but political de­ci­sions – taken for no dis­cern­able le­git­i­mate rea­son – have made things worse.

“Cen­tral bankers are ra­tio­nal be­ings,” Kganyago told re­porters this week. Ask the pres­i­dent about the Nene af­fair, he added.

Fi­nance Min­is­ter Pravin Gord­han is ex­pected to an­nounce that there has been sig­nif­i­cant tax col­lec­tion, some ex­perts from Deloitte tell us. In­come tax is ex­pected to rise again, none­the­less.

With in­fla­tion ex­pected to rise in­ex­orably through­out the year, an­other aus­ter­ity bud­get is the last thing we need.

But with growth ex­pected to be prac­ti­cally noth­ing, it is prob­a­bly the only thing we can ex­pect.

Now let’s talk about those nu­clear re­ac­tors.

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