FOOD prices are expected to remain high for the rest of the year, thanks to higher transport‚ electricity and refrigeration costs‚ and wage increases‚ the Reserve Bank said in its annual economic report yesterday.
Food prices would remain elevated despite the recent moderation in domestic consumer food price inflation.
Consumer food price inflation decelerated in the opening months of the year to 6.8% in May.
The moderation resulted mainly from lower rates of increase in the prices of bread and cereals‚ meat‚ oils and fats‚ fruit and vegetables.
The report noted in particular the moderation in meat price inflation, which represents the highest weight within the consumer food basket. This component decelerated from a high of 16.7% in December last year to 7.0% in May.
Meanwhile, the bank said only 448000 jobs had been regained from the one million jobs lost between the fourth quarter of 2008 and the third quarter of 2010.
It referred to South Africa’s employment recovery as hesitant‚ and highlighted in particular the job losses within the country’s key sectors of mining and manufacturing, which together account for a large number of formal sector jobs.
Employment growth in the mining sector decelerated notably from a year-on-year rate of 4.2% in the second quarter of last year‚ to 2% in the year to the first quarter of this year‚ the annual report said.
Lower commodity prices‚ widespread industrial action and safety-related work stoppages since the middle of last year have plagued the sector.
Uncertainty surrounding the mine nationalisation debate also negatively affected the sector‚ according to the Reserve Bank report.
"However‚ the uncertainty has subsided somewhat‚ as government indicated that instead of mining nationalisation‚ changes to mining taxation would be considered‚” the bank said.
It noted that although employment in the manufacturing sector increased marginally at annualised rates of 1.6% in the fourth quarter of last year and 0.4% in the first quarter of this year‚ employment growth in the sector remained very hesitant.
"The manufacturing sector remains susceptible to renewed weakness in the global economy‚ particularly in the euro area‚ through possible declines in exports‚” it said.
Public sector employment is reported to have increased in recent years as government tried to mitigate job losses in other sectors.
According to the report‚ public sector employment growth accelerated to 4.6% last year‚ the highest rate since 1975. – I-Net Bridge