SA braces for budget that could change cost of living

SOUTH Africans battling high food and fuel costs could get some relief, if the Reserve Bank's calculations are right.

- NICOLA MAWSON

The markets will be watching Finance Minister Enoch Godongwana closely when he delivers the Medium-Term Budget Policy Statement tomorrow.

Tomorrow's budget is likely to bring the cost of living into sharp focus, with economists saying he could well back a plan to lower the country’s inflation target range.

Reserve Bank Governor, SARB Governor Lesetja Kganyago, has been pushing to lower the inflation target from the current 3%-6% range to a flat 3%.

Kganyago argues that a lower target would support “sustainable economic growth and cheaper borrowing costs”.

This could eventually make borrowing and living costs cheaper.

Investec treasury economist Tertia Jacobs said the change would give the policy more credibility.