Food basket. The newly restructured basket of goods has seen additions of 71 new products and the removal of 53, making a total of 391 products in the index. File picture.
Image: File picture.
As South African consumers brace for fuel price adjustments set to take effect in March, the latest Household Affordability Index for February raised alarm bells about the state of household finances.
These developments underlined the struggle families face amidst rising living costs, and the implications are widespread, affecting daily commutes, food prices, and overall economic stability.
This was further compounded this past week as data from Statistics South Africa (Stats SA) showed that the rate of headline consumer price inflation (CPI) rose for the third month from 3% in December 2024 to 3.2% in January 2025, the highest in four months, compared with market forecasts of 3.3%.
This means that consumers in South Africa will continue forking a bit more for food and beverages at the tills as headline inflation continues to be on a steady upward swing, rising for the third consecutive month in January 2025.
The largest single component of CPI however is food prices influenced by both domestic and international agricultural food prices.
In January, food and non-alcoholic beverages inflation saw a 2.3% year-on-year outcome, from 2.5% in December, with high statistical base effects year on year once again keeping the measure moderate in the face of the start of the year general price pressure increases.
This headline print comes as Eskom has been granted a tariff increase of more than 12% for the next financial year, which is going to cripple household income expenditures as more money goes to pay for electricity.
The Household Affordability Index revealed a mixed bag of outcomes for South African families struggling to make ends meet.
Data was released on Wednesday by the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) that showed in February 2025, the average cost of the Household Food Basket was R5 313.22.
While the food basket price showed a decrease of R120.48 (-2.2%), from R5 433,70 in January 2025 to R5 313.22 in February 2025, year-on-year the price had increased.
Year-on-year, the average cost of the Household Food Basket increased by R35,92 (0.7%), from R5 277,30 in February 2024 to R5 313,22 in February 2025.
Abigail Moyo, spokesperson of the trade union UASA said that the latest CPI data was the first calculated according to the new basket of goods.
"While the CPI is still favourable for consumers, several economic challenges that may disrupt the current trend lie ahead. South Africans still await the National Budget Speech following its postponement over the possibilities of VAT increases. Fuel prices are expected to increase at the beginning of the month, and electricity tariff hikes will occur in April. Difficult financial times may lie ahead for workers. UASA calls on the government to relook consumers’ overall cost of living and pricing of utilities, essential goods, and services to lessen the burden," Moyo further added.
The only form of relief may come in the fuel price adjustments for March, as analysts do not expect any steep increases.
After a series of four consecutive fuel price increases, the next crucial update will be revealed soon.
Johann Els, Old Mutual Group chief economist, said that he believed there will be no change in the fuel price when the announcement is made next week.
“As of Friday 21 February there was a 28 cents per litre over-recovery in the fuel price. The running average price for the month is minus 3.2 cents per litre," Els said.
Efficient Group chief economist, Dawie Roodt, said that he expected a very small change in the petrol and diesel price next week.
“It might increase or decrease by one or two cents. The main reason for that is that the price of international Brent crude oil and the rand exchange rate has been unpredictable,” Roodt said.
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