This paper reports a comparison of South African household inflation expectations and inflation credibility
surveys undertaken in 2006 and 2008. It tests for possible feed-through between inflation credibility and
inflation expectations. It supplements earlier research that focused only on the 2006 survey results. The
comparison shows that inflation expectations differed between different income groups in both 2006 and
2008. Inflation credibility differed between male and female respondents, but this difference did not feed
through to inflation expectations.
More periodic survey data will be required for developing final conclusions on the possibility of feedthrough
effects. To this end the structure of credibility surveys should be reconsidered, as a large
percentage of respondents indicated that they ‘don’t know’ whether the historic rate of inflation is an
accurate indication of price increases.
We propose a comparison between atheoretical and theoretical models in forecasting the
inflation rate for an inflation-targeting country such as South Africa. In a pseudo real-time
environment, our results show that for ...
Inflation targeting anchors inflation expectations, which are not within the sphere of control of the authorities, but can only be influenced over time by consistent policy. As public distrust of inflation figures will ...
As inflation credibility in South Africa records low readings when measured in terms of inflation
credibility barometers, this note aims at assessing whether actual price movements provide any
grounds for low inflation ...