A major new report from the Competition Commission has found that the relentless rise in the price of essential goods is drastically outpacing wage growth, placing an unsustainable burden on South African households, particularly those with the lowest incomes.
The comprehensive Cost of Living Report, which covers the period from 2020 to March 2025, expands on the commission’s original Essential Food Price Monitoring initiative. It paints a stark picture of financial strain, revealing that workers are now spending nearly two-thirds of their monthly earnings on basic necessities.
The study found that inflation on essential goods has consistently risen faster than wages, severely reducing the purchasing power of consumers. A significant portion of household budgets is being consumed by essentials, with spending on food and alcoholic beverages alone making up over 40% of total expenditure for poor households.
Economist Andiswa Sibhukwana from the Competition Commission explained the report’s findings. “In essence, the Cost of Living Report has highlighted key elements. It’s basically alluded to the rising economic strain on households,” Sibhukwana said. “Households have faced deep financial pressure, especially low-income communities.”
A key concern raised is the behavior of retail prices, which continued to climb even during periods when producer costs fell. However, the report singles out the ballooning cost of non-food items like water and electricity as a primary driver of inflation, rising significantly above the overall inflation rate.
Sibhukwana highlighted the role of utility tariffs, stating, “We would like to also make awareness of the fact that these price increases have contributed substantially due to ESKOM’s municipal tariff increases.” The commission noted the highest increase was an 18.49% jump in 2023, followed by consistently high increases of 11.32% in both 2024 and 2025.
The report also examined transportation and other costs. It found that minibus taxi fares tend to increase following a major spike in petrol prices but are seldom reversed once fuel costs decrease. In a rare piece of positive news, the commission described the cost of funeral policies rising significantly below overall inflation as “encouraging,” given their critical importance to low-income households.
The data underscores a growing economic divide, confirming that the most vulnerable populations are bearing the brunt of the ongoing cost-of-living crisis.