MEDIA STATEMENT
BY THE
INKATHA FREEDOM PARTY
Adjust Inflation Targeting
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IFP MEDIA
STATEMENT BY: 26 March 2008 The IFP would like to call on the Reserve Bank and its Governor Tito Mboweni to look at adjusting inflation targeting as a matter of urgency. The increase in SA's consumer inflation of 9.4% in February 2008 is of extreme concern to the IFP, but it was to be expected with the acceleration of increases in food and fuel prices. The IFP is supportive of a policy of inflation targeting in order to control inflation, but inflation targeting should be realistic and take into consideration the reality of prevailing international conditions, and furthermore the government itself should also take responsibility for its own role in fuelling inflation. The spiralling international oil price is out of control, which has a devastating effect on all forms of transport and particularly on the price of capital and consumer goods, as well as food prices. The sad irony about inflation targeting is that Government, local government and statutory bodies seem to be outside the spectrum of the inflation target program. Statutory increases, the Eskom fiasco with its resulting price hikes and local authorities that are increasing their tax regimes by charging rates way above the Reserve Bank's targeted inflation rates. Government must recognise that statutory entities and institutions which are increasing their rates and costs that are higher than the targeted inflation rates, are completely outside the control of the victimised South African industry and public. Surely this Government is as much to blame for the out of control rise of the inflation rate as the devastating external factors. Until Government gets its own act together with regard to controlling its own departments, local government and statutory bodies, we will know that inflation targeting is simply lip service and only discriminatory to the public and the private sector. South
African consumers will not be able to cope with another interest
rate hike and therefore the IFP believes it is now high time
that Government and particularly the Governor of the Reserve
look at this situation with urgency and realise the necessity of
adjusting the inflation target upwards. For more information: |