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Statistics South Africa reported yesterday that the consumer price index (CPI) rose 6,4 per cent from August 2012 to August 2013. This is the highest inflation rate since August 2009. 
A weak rand, which pushed up the price of petrol by 32c a litre last month, was the major contributor to rising living costs. The petrol component in the CPI rose a massive 23 per cent in the last year. Petrol has a weighting of almost 6 per cent in the CPI basket. 

  1. Use the information in the extract to explain the link/relation between the consumer price index and inflation.
  2. Suggest ways in which consumers can reduce the effect of:
    > The weak rand
    > The increased petrol price
in Grade 12 by Master (890k points) | 1.0k views

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  • The consumer price index shows/measures a change/increase in the price/costs of a group of products and services over a year.
  • The consumer price index is the tool that is used to measure inflation.
  • Inflation is the annual percentage change in the consumer price index.
  • The inflation rate is the percentage at which the price of goods and services increases.
  • In the extract the price of goods and services rose 6,4 per cent over a year. Therefore that was the inflation rate for that year.

2.1. Weak rand: Do not buy/buy fewer imported goods because they are more expensive /buy locally produced products.

2.2. Increased petrol price: 

  • Travel less in your own car/become part of a lift club/make use of public transport to reduce the money spent on personal transport.
  • Use cheapest mode of transport available.
  • Combine rides for errands to be done to reduce the amount of money spent on transport.
  • Walk where you can to reduce the amount of money spent on transport.
  • Buy locally produced goods because there are no/less transport costs involved and they will be cheaper
by Master (890k points)
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