By Nco Dube | 24 September 2025

South Africa’s headline inflation eased to 3.3 percent year-on-year in August 2025, down from 3.5 percent in July. On the surface, this three-month low hints at a stabilising economy and a win for households squeezed by rising prices. But beneath the veneer of subdued headline figures lies a harsher reality: food, transport and energy costs remain stubbornly high, exacting a heavy toll on the poorest families who spend the lion’s share of their income on these essentials.

The Illusion of Low Headline Inflation

The Consumer Price Index (CPI) measures the average change in prices that urban households pay for a basket of goods and services each month. Economists and central bankers fixate on the headline rate because it broadly tracks cost pressures across the economy. Yet this single figure masks wide divergences in the prices of staples and services that matter most to low-income households. In August, a core inflation measure excluding food, energy, alcohol and tobacco, was 3.1 percent, still within the South African Reserve Bank’s target band of 3 to 6 percent, but hardly a comfort for those facing relentless price hikes elsewhere.

The Bitter Pill of Food Inflation

Food and non-alcoholic beverages remain the second-largest contributor to headline inflation, adding 0.9 percentage points to the 3.3 percent annual rate. In August alone, that category rose 5.2 percent year-on-year, down only slightly from 5.7 percent in July. Within this basket the story is uneven. Staples such as white rice and breakfast cereals are now cheaper than a year ago, white rice is down 7.2 percent and hot cereals down 7.8 percent thanks to global price softening and strong local harvests. But other basics have surged: samp rose 14.8 percent and maize meal 8.2 percent, keeping breadwinners scrambling for alternatives at the market stall. Meat, too, remains prohibitively expensive with beef mince up 27.2 percent and stewing beef up 32.3 percent forcing poorer families to downgrade to less nutritious substitutes or skip protein altogether.

Transport and Energy: The Unseen Toll

The transport category registered deflation of 5.7 percent, driven largely by lower petrol and diesel prices. While this provided some relief to the headline rate, it belies the rising cost of public transport fares and the unpredictability of bus and taxi services in outlying townships and rural towns. At the same time, electricity and other fuels climbed 8.7 percent year-on-year, making even a single load shedding episode or a spike in municipal tariffs a make-or-break expense for households already juggling four-figure budgets at month’s end.

Beyond the Numbers: Impact on Poor Households

For the poorest tenth of South African households, food, transport and utilities account for more than 60 percent of monthly expenditure. When maize meal soars, taxi fares rise and municipal bills bite deeper, there is no cushion. Parents skip meals to feed children; informal traders scale back stock; and daily travel to work or school becomes an act of financial bravery. In many townships, a once-routine trip to the clinic or the spaza shop now means choosing between transport cash and buying cooking oil.

The Reserve Bank watches the headline CPI to guide interest-rate decisions. A low inflation rate can pave the way for rate cuts that bolster growth. Yet rate relief does little for families whose budgets are squeezed not by credit costs, but by staples, fuel and electricity. Core inflation hiding at 3.1 percent may satisfy technocrats, but for millions, the cost-of-living crisis rages on, far from the sanitised numbers that fill policy reports.

A recalibration is overdue. National and provincial governments must complement monetary policy with targeted interventions:

• Introduce food-voucher schemes for vulnerable households, pegged to maize meal and other staples.
• Implement temporary travel subsidies or capped taxi fares in underserved areas.
• Fast-track renewable-energy roll-outs in informal settlements to reduce electricity bills.
• Enforce retailer and fuel-company transparency on price adjustments, deterring unjustified mark-ups.
• Scale up community savings and credit co-operatives to help families manage cash-flow shocks.

These measures require political will and cross-sector collaboration. They demand that we stop treating headline CPI as the sole barometer of household well-being.

Conclusion: Measuring What Matters

August’s CPI number of 3.3 percent may be welcomed by financial markets and the Reserve Bank, but it is no panacea for the day-to-day realities of poor South Africans. True success lies in taming food, transport and energy inflation so that families can afford a decent meal, a safe journey to work and reliable light at home. If we look beyond the aggregate rate and direct support where it is needed most, we can turn an abstract statistic into tangible relief and restore faith in an economy that too often fails its most vulnerable citizens.

(Dube is a noted Political Economist, Businessperson, and Social Commentator whose insights are regularly featured on UkhoziFM and in various newspapers. For further reading and perspectives, visit: http://www.ncodube.blog)