I have found this little economic “exercise” delightfully interesting – with Christmas hardly a fortnight away!
Upon closer examination of the “menu” and after reading the notes at the end, I have decided not to “skip the pudding” over the festive season, but rather tighten my “financial belt” (budget effectively) and invest my savings in a concerted effort to build wealth during 2013 and beyond! How about joining me in a most worthwhile New Year’s Resolution and lets put together a plan to fight inflation in real terms and start experiencing a real sense of financial wellbeing and a feeling of accomplishment as we usher in our own new look wealth creation and wealth protection program during 2013.
Have you ever wondered how much more you will have to fork out for dinner this Christmas? We have conducted an exercise to illustrate how much more this year’s Christmas feast could cost.
First of all, let us take a look at the menu:
1 Year Inflation
|Shrimp per kg||
|Lemons fresh 4’s||
|Bay leaves 10gr||
|Tomato sauce 750m||
|Hot pepper sauce 150ml||
|Roast Chicken and Gammon|
|Whole fresh chicken per kg||
|Gammon per kg||
|Roast potatoes per kg||
|Cauliflower fresh per kg||
|Cheddar cheese per kg||
|Carrots per kg||
|Red Jelly 80gr||
|Green jelly 80gr||
|Mixed glaze cherries 75gr||
|Fresh cream 250ml||
|Total dinner inflation||
To remove the assumptions, bear in mind that the prices used represent average prices throughout South Africa. Data was obtained from Stats SA and substitutes were used where the exact product was not listed.
Inflation for the meal was very close to what we expect total country inflation to average this year (5.7%). This means that the price of your Christmas dinner did not increase more than the average price increases of other goods during the year, even though there were some outliers here and there.
Here’s some food for thought: The highest price increases were that of custard, jelly and cherries. It seems as if it is the pudding that will have you digging deeper into your pockets this festive season. This tendency is also reflected within the grouped inflation index for sugar, sweets and desserts, with much higher increases than any other category of food this year (averaging 10.4% versus 6.9% for all other food).
It is also interesting to note that the price of potatoes contracted by 9.3% this year. The price growth of fish (shrimp) and rice has also been exceptionally slow, cushioning the faster growth of other food prices.
The official word of advice from us – if you want to save money (and be kinder to your waistband) this Christmas, skip the pudding!
Economics Plus is written by Merina Willemse, Efficient Group Economist.