Just dropping in on Bloomberg: South African inflation raises to 12,9% in July, coming from 11,6% in June. This is the fastest growth since the CPIX inflation index was introduces in 1998. By way of comparison, the comparable Brazilian IGPM inflation index fell in July with 0,32% to 6,32%; that less than half the South African inflation in July.
Yet, both countries have today the exact same growth expectations for 2008: 4,8%.
Remember the definition of inflation: “a net expansion of money supply and credit”. While Brazil is enjoying a healthy economical growth with deficits after years of tight monetary policies, South Africans can't hold their horses to get again 'cheap credit'. I only don't like Lula announcing that he will increase government spending by 13% in 2009; yes that is a pre-election year. Yet don't expect things to be better in South African's pre-election year; Zuma can learn wise lessons from Lula.
Inflation in South Africa and Brazil
By John Baeyens | Share This
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