PODCAST | Decisions, decisions: Q2 inflation set to keep SA on its toes

Understanding how people make economic decisions during these tough times is the focus of this edition of the Business Day Spotlight.

Host Mudiwa Gavaza is joined by Emile du Plessis, a behavioural economist at Standard Bank. 

The discussion begins with a look at the area of behavioural economics. Du Plessis says this is in essence the study of how people make economic decisions. 

To understand the pressures facing consumers, Du Plessis says South Africans are increasingly paying more for goods and services due to rising inflation. Headline inflation is projected at 4.8% in 2022 and 4.4% in 2023, according to the National Treasury. Rising energy and fuel prices are expected to be key sources of inflationary pressure in the year ahead.

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Du Plessis focuses on supply and demand imbalances affecting the economy; understanding one’s individual inflation basket; softening the impact of inflation on budgets; and controlling costs . 

He explains how factors such as Covid-19, rising oil prices, the Russia-Ukraine crisis and interest rates are all working to influence how consumers make decisions. He distinguishes between those working to survive and those working to maintain a certain lifestyle, explaining that low-income households — with fewer savings and therefore less financial flexibility — are most susceptible to risks such as inflation. 

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• Business Day Spotlight is a MultimediaLIVE production.