According to the National Treasury, headline inflation is expected to be 4.8 percent in 2022 and 4.4 percent in 2023.
Food and energy prices, particularly municipal rates from rising electricity prices, and also high domestic food inflation and high fuel prices, are predicted to be the main sources of inflationary pressure in 2022. "Due to rising global crude oil prices, fuel costs increased by 40.4 percent in the year to December 2021."Fuel prices are likely to decline in 2022, but they will remain high and above the 2019 average.
"Global supply-demand mismatches have caused a spike in the price of raw materials and intermediate inputs, which will continue to push consumer inflation higher. "The inflation prognosis is expected to rise in the medium term, owing to price pressures from food and nonalcoholic drinks, as well as petrol, energy, and other administered prices.
"Although the forecast assumes that electricity prices will rise in 2022 and 2023 in line with Eskom's application for a tariff increase in 2022/23, there is a risk that electricity inflation will exceed the assumption due to rising costs of ensuring electricity supply," Treasury said in the Budget Review document.