Eskom’s price hikes will curb growth

By Khanyisa Tabata
14 October 2009

Economists say Eskom’s application for a 45-percent electricity tariff increase for each of the next three financial years is likely to hamper South Africa’s recovery from the recession and curb economic growth.

Analysts say the proposed tariff increases will push inflation up by point-four percentage points over each of the next three years, keeping it above the three-to-six-percent official target range.

According to media this will probably force the Reserve Bank to keep interest rates higher for longer. Small businesses and farmers will also be hard hit, leading to job losses.