Prices are increasing, but are there second-round effects?

Statistics South Africa yesterday announced March's consumer price index and inflation increased from 5.7% in February to 5.9% in March. Transportation was the category that contributed the most to the increase. Remember, fuel prices rose by 7.2% between February and March. There were also increases in the cost of air transport, bus transport and tolls. Food prices are the other important category where prices increased, but the increase has been at a slightly slower rate than in recent months. Fruit and vegetable prices were slightly lower in March. The inflation rate is now at the top of the Reserve Bank's target band and economists expect further repo rate hikes. * The Economics Minute is supported by the NWU Business School.