Cost of Living report shows households in SA are buckling under pressure

The Competition Commission's Cost of Living report shows electricity and water prices are rising significantly faster than inflation, intensifying pressure on household budgets.

Based on data from Statistics South Africa, the report found that over the past six years, electricity prices surged by 85% and water by 68%, compared to overall inflation of 30%.

The findings come as consumers face fresh price shocks, including higher fuel costs and a near 10% increase in electricity prices this week.

This is the second edition of the Cost of Living report, compiled from publicly available data.

It confirms that administered prices, particularly electricity and water, have consistently outpaced inflation since 2020.

The report also shows education costs are outpacing inflation, with primary education up 37% and secondary education up 42%, driven by funding shortfalls and higher operating costs.

Despite a decline in headline inflation over the period, there’s no corresponding improvement in affordability.

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Households continue to face sustained cost pressures, with food prices remaining elevated and many families struggling to afford basic nutrition.

Last week, the Reserve Bank Lesetja Kganyago warned that external shocks, including geopolitical tensions that have jacked up oil prices, limit the effectiveness of monetary policy.

Adding lower administered prices could help contain inflation risks. But the commission’s report shows these prices are instead rising sharply, placing a disproportionate burden on low-income households.