Image Source: The Citizen
Local – Despite South Africa’s inflation rate dropping to 3.2% in 2025, its lowest level in 21 years, many households are not feeling the relief, according to economist and political analyst Dr Dale McKinley.
While Statistics South Africa’s headline inflation figure moves closer to the Reserve Bank’s new 3% target, the reality for ordinary South Africans tells a different story. Dr McKinley explained that breaking down the numbers reveals significant disparities across various sectors.
Food prices remain alarming, with some items experiencing inflation rates double or triple the headline figure. Red meat inflation has reached 12% over the past year, while cereals have become 6-7% more expensive.
Although maize meal prices have declined somewhat, many staple items essential to working-class households have not decreased substantially.
“There is much much higher inflation rates for example for food items, almost double to sometimes triple that 3.2%. Red meat, for example, is up to 12% inflation over the last year,” McKinley said.
Utilities and housing costs continue to pressure household budgets. Municipal rates and taxes have increased across every municipality, while housing prices remain inconsistent with the broader inflation trend. The impact varies based on income class and geographic location.
“For the middle and upper middle class who are much more capable of absorbing some of the other shocks, this is good news for investors, but for working class and poor people, not so much,” McKinley said.
The economist highlighted fuel costs as one bright spot, with transport inflation declining substantially. He cautioned that lower prices for manufactured and retail goods might signal increased imports, potentially harming domestic manufacturing industries.
Dr McKinley projects gradual stability throughout 2026, with headline inflation likely reaching the 3% target. The Reserve Bank may cut rates by 25-50 basis points later in the year, though he said this benefits those with capital more than job seekers.
“While it’s a decent story the story is still only the glass is only still half full,” McKinley said.
