South African consumers are worse off today than they were in the 80s, despite the fact that the prime interest rate at 12 percent is at its lowest level in 17 years, say economists.
Last month Statistics SA released data showing inflation was down to 1,5 percent in October 2003 - its lowest level since February 1964 when it was 1,2 percent.
Core inflation, a better measure of daily living costs because it excludes the effect of interest rates and volatile foodstuffs - which, following the fall of the rand, peaked at 9,9 percent last December - was down to five percent.
Consumers, however, are treading water to keep liquid assets afloat against a flood of price increases and slow climbing wages.
In 1982 the prime interest rate was 12,5 percent. But wages have not kept pace with the rising cost of living over the past two decades, especially for low income earners.
The wages of artisans such as carpenters and bricklayers have increased twofold from R7,81 to R18,03 an hour and R5,71 to R13,46 an hour respectively since 1982.
Hotel managers earn seven to 25 times more than the R1 200 a month they were paid 20 years ago.
Teachers earn 10 times more today - R7 091 a month compared to R702 in 1982 - while admin clerks and secretaries earned around R450 compared to R4 000 to R5 000 today.
However, prices of basic food items like bread have increased 15-fold while infant formula, vegetables and clothing have risen on average 12-fold since 1982.
Consumers pay R4,69 for a 700g loaf of white bread now compared to 35c for a 900g loaf in 1982. A 15kg pocket of potatoes cost R2,99 then and today costs R32,99 - 11 times more - for a smaller 10kg bag.
In contrast, the prices of hard commodities like video cassette recorders and cameras have decreased. Luxury purchases like holidays and washing machines cost just marginally more relative to current salaries.
Trade economist Mike Schussler said despite low inflation South Africans were worse off than they were 20 years ago.
"The gross national product has declined significantly by 10 or 15 percent and people's salaries have not kept up with the inflation rate to the extent they should have because there has been a productivity increase in South Africa. As a result we have lost more than 110 000 formal non-agricultural sector jobs in the last year.
"Food prices in South Africa have followed international price trends since we opened up the market and got rid of the old agricultural marketing boards which kept prices high when world prices were low."
"However, food prices worldwide haven't fallen over a 20-year period in dollar spend the way hard commodities have fallen. Soft commodities in rand terms have increased a lot although they have come down recently. But we have also had the benefit of cheaper imported lamb, chicken and pork."
The cost of medicine and education has also increased very much in line with food," Schussler said.
He attributed the steady upward trend of food and clothing prices to the demand for these basic needs as well as the fact that there was now no government control on bread prices and fewer foodstuffs were tax-free.
Property is also on average 10 times more expensive than it was in 1982 and prices of used and new cars have climbed.
A new Toyota Corolla 1600 cost R6 785 in 1982. This increased to R38 030 in 1992 and to R129 715 in 2003.
Toyota SA spokesperson Richard Wingfield said: "The exchange rate improved in the last couple of months, but a vehicle price consists of more than just imported material, which is directly linked to exchange rate fluctuations. We have local components resulting in local inflation."
"Reducing vehicle prices is highly unlikely as this would have a detrimental affect on the resale values of vehicles," he said.