* * ****
*Numsa Response to SARB’s Monetary Policy Committee* *15 May 2011* The National Union of Metalworkers of South Africa (*Numsa*) has noted the Monetary Policy Committee (MPC) statement issued by the Reserve Bank on Friday 12 May 2011. Unsurprisingly, the MPC‘s stance on maintaining inflationary figures within the targeted range has not changed. According to the MPC, the inflation outlook continues to deteriorate, with the year-on-year inflation rate in urban areas increasing to 4.1% in March 2011; up from 3.7% in February. The main drivers behind this increasing inflation rate are the significant price increases that have been experienced in fuel, electricity and food. Food inflation has increased by a significant 1.6% just in the last two months while petrol and electricity prices have increased by a whopping 16.9% and 19.3% respectively. These increases in the prices of goods which feature prominently in the basket of goods demanded by workers, only serve to put more pressure on workers’ wages, which are already severely constrained. Numsa therefore challenges the insinuation madeby the MPC that unit labour costs and increases, by virtue of being marginally above inflation, are contributing to the unfavourable employment environment, and by extension, to the slow economic growth. These increases come off a very low base, and workers are still forced to live hand to mouth, even after these meagre increases have been effected. While Numsa is encouraged by the MPC’s decision to keep interest rates unchanged, we maintain that this approach is too conservative given the increased cost pressures on the incomes of all South Africans.The Reserve Bank has to begin moving towards a policy stance which focuses on supporting job creation and improved living standards. Instead, the MPC boldly continues to insist that they will not hesitate to respond to signs that threaten to move inflation out of the targeted range. Numsa believes that this short-sightedness and inflexibility by the MPC only serves to further undermine the broader government economic growth objectives. Numsa reiterates its call for the nationalisation of the Reserve Bank in sync with our objectives of building a new economic trajectory geared towards building people’s economy for people’s power. Contact: *Neo Chabane, NUMSA Chief Economist – 083 762 0185* -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. You can visit the group WEB SITE at http://groups.google.com/group/yclsa-eom-forum for different delivery options, pages, files and membership. To UNSUBSCRIBE, please email [email protected] . You don't have to put anything in the "Subject:" field. You don't have to put anything in the message part. All you have to do is to send an e-mail to this address (repeat): [email protected] .
