Inflation targeting 'a mystery'

Johannesburg - Inflation targeting is a mystery to most South Africans, a survey released by TNS Research Surveys on Tuesday shows.

According to its findings, 38% of metro adults felt that the Reserve Bank's policy of inflation targeting was correct.

However, while just 20% disagreed, a huge 42% gave a "don't know" response.

TNS said the figure of 38% was largely unchanged across race groups and gender though older people (those aged 60 years and more) were more positive at 48%.

There was more support amongst the more affluent (43%) than amongst poorer people (27%) and amongst the more educated (54 percent for those with a university education).

However, resistance to the policy did show some greater demographic differences with whites, coloureds and Indians/Asians being more resistant (mid 20%) than blacks (17 percent).

Further, there was also more resistance to the policy amongst the most affluent (32%) compared with poorer people (15%).

"The big story is that most people have no idea," TNS said.

With 42% of people giving a "don't know" response, it was clear that this policy - so controversial in some quarters - was a complete mystery to very many people.

"As the results suggest, better educated and more wealthy people are the most knowledgeable about this policy, with poorer people showing the highest levels of the 'don't know' response," TNS said.

"It seems that the importance of understanding the policy should be wider.

"Interest rates have a profound effect on every citizen."

Some organisations such as the Congress of SA Trade Unions vigorously opposed inflation targeting.

"It seems that the policy needs more open debate so as to add to the understanding of the general public around something that affects us all," TNS said.

The study was conducted among 2 000 adults (1 260 blacks, 385 whites, 240 coloureds and 115 Indians/Asians) in the seven major metropolitan areas.

- Sapa