The National Planning Commission has warned that rising inflation will likely trigger higher interest rates, which would slow down economic growth and job creation.

Commissioner Ravi Naidoo says this comes at a time when South Africa is struggling to meet its growth targets, as set out in the National Development Plan.

Naidoo says as part of building economic resilience, this period of uncertainty calls for strengthening key sectors and improving collaboration between business and the government.

His comments come after the latest data from the Central Energy Fund, suggest increases of more than R5.70 per litre for petrol and nearly R10 per litre for diesel, driven by high international oil prices and a weaker rand.

At the same time, power utility Eskom will implement the 8.76% electricity tariff increase on Wednesday, further eating into the pocket of a distressed consumer already battling to survive the rising food and transport costs.

“When you have a fuel price that is unstable and rising, it means obviously that inflation across the board is rising, and our monetary policy is very much focused on trying to control inflation and putting up interest rates”, says Naidoo.

He says, “When you put up interest rates, what happens is you push down economic growth and jobs. We need economic growth to fuel our National Development Plan, assume growth of 5%, and you know we’re getting 1%. So this increase in fuel price and inflation is obviously not a good thing”.

“We have to take that into account that, you know, this is going to be an ongoing problem. What we have to do is look at particular sectors that we can grow. Think of things like agriculture, you know, we have a lot of commodities in the region, think of tourism, you know, people are not going to be travelling, so Africa is a relatively safe, stable, cheap place to come and visit as a global tourist”, Naidoo adds.

He says,”We will be able to do better in sectors like tourism. There’s light manufacturing, digital sectors, all these things are part of the national development plan, and we need to really take these forward as we go.”

Video | Commissioner Ravi Naidoo on the sustainable strategies to reduce SA’s fuel vulnerability