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Until recently, South African salaries and wages were expected to increase only moderately during 2022. However, producer price inflation has accelerated over the past six months — and in March and April in particular — due to higher international commodity prices. Local businesses have had to pass on these cost increases to consumers, and in March, consumer price inflation accelerated to 5.9% y-o-y.
Alongside a recent deterioration in South Africa’s overall inflation environment, survey data shows that trade unions’ expectations have grown for more substantial upward adjustments in remuneration as workers' cost of living increases. This will have a varying impact on different industries and sectors depending on their overall exposure to labour as an input cost.
PwC’s South Africa Economic Outlook (April 2022) report updates our different forward-looking scenarios for the South African economy. At the core of this is the prospect of elevated inflation and the impact that this will have on adjustments to salaries and wages.
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