Everything seems to be getting more expensive recently. The price of petrol and electricity has just been increased… again. And that’s just the beginning. Those two essential increases have a domino effect on most goods, with inevitable hikes in transport and food costs.
Already cash-strapped consumers have other increases to negotiate in the coming months thanks to the weakening Rand, which leads to increased inflation. Some of the affected goods include ARVs to vehicles, and just about everything in between.
Technology cost increases
Another crucial cost which is expected to rise is that of computer and tech equipment. Prices on laptop computers and accessories have already increased more than 15% on average this year and are expected to increase even further. The prices of technological goods are almost always affected by fluctuations in the Dollar/Rand exchange rate.
“The Notebook Company has been forced to up its prices this year. Due to the weakness of the Rand against the Dollar each shipment of computer goods needs to be considered to see if a price hike is required,” The Notebook Company chief executive Christopher Riley said. “We don’t see the Rand improving any time soon, so the prices of certain computer products will remain considerably higher than last year. We just cannot absorb the weakness of the Rand.”
“Some computer stock is flown in – and some is shipped in. When products are flown in, it is easy for vendors to adjust their prices timeously.”
“But when they are shipped in the prices can be effected while the products are still at sea, meaning that computer vendors cannot always foresee higher costs. Vendors, in these instances, have to take a price knock until adjusting prices for the next shipment,” Riley says.
July will be a tough month for consumers. We’ll have to adjust to new constraints on our already slim wallets. Electricity for municipal customers has increased by 12.69% as from 1 July. South Africans, already feeling frustrated by ongoing load shedding – which is becoming increasingly difficult as the days become colder – will no doubt begin to feel more and more frustrated by Eskom’s woes. The 1st of July also saw a petrol increase of 44c, the third this year. According to the Department of Energy this increase was also due to the weakening of the Rand against the Dollar.
Mike Schussler, chief economist at economist.co.za, says South Africans have refrained from spending during these times with the economy showing signs of being subdued. “The plain fact is that the South African economy is being held back by power outages and large fuel price increases.” He said that while the actual petrol and diesel prices were well below last year’s levels, the massive hikes this year have hampered confidence and spending power. If you have been considering a new laptop, perhaps now is not the best time to think about upgrading your equipment – it might be more prudent to ride out the storm for now.
Ironically, July also marks National Savings Month, a campaign intended to encourage South Africans to save more of their money. With ever-increasing costs, South Africans will no doubt find it harder to do so.
*This article originally appeared on MWEB.