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ActionSA welcomes the latest inflation data released by StatsSA today, showing that annual consumer price inflation (CPI) dropped to 2.8% in October, its fifth consecutive monthly decline. While this is a positive development, this brings little respite to already distressed households.

As such we continue to urge the government to implement bold economic reforms to mitigate the persistent financial distress experienced by South African households despite easing food prices.

Specifically, we implore the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, to reduce the interest rate by 50 basis points (bps) at the upcoming Monetary Policy Committee meeting. A reduction greater than the anticipated 25 bps will provide much-needed relief to financially stretched households and struggling businesses.

The latest data shows annual food inflation at 3.6%, falling below ActionSA’s benchmark of 4% for the first time since the formation of the GNU. Rising food prices disproportionately affect the most vulnerable in society, and ActionSA’s GNU Performance Tracker uses this metric to measure whether the government is prioritising the livelihoods of all South Africans. We welcome this progress but caution that the financial crisis facing South African households remains acute.

For example, SARS reported this week that more than R35 billion has been withdrawn under the two-pot pension system since its introduction on 01 September, highlighting the extent of financial strain. Alarmingly, more than 41,000 applicants were declined withdrawals because they lacked sufficient funds in their pension savings, underscoring the precariousness of many families’ financial situations.

Moreover, looming threats such as Eskom’s proposed 36% tariff increase next year risk eroding any disposable income gains from reduced food prices. Without meaningful economic growth, these short-term improvements will do little to raise the living standards of the majority. The pedestrian GDP growth rates projected in the MTBPS—1.1% for the current year and an average of 1.8% over the next three years—are wholly inadequate. It is no longer enough to talk about bold reforms; what is needed is decisive action.

ActionSA will continue to advocate for pragmatic, implementable policies that can significantly increase economic growth and ultimately the living standards of all South Africans.

Issued by ActionSA Member of Parliament Alan Beesley