UASA warns of rising inflation's impact on South African consumers
Labour union UASA highlights the worrying rise in Consumer Price Inflation to 3.5% in July.
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Labour union United Association of South Africa (UASA) said the rise in Consumer Price Inflation (CPI) to 3.5% in July, up from 3% in June, reveals concerning factors regarding the cost-of-living outlook.
The union noted that earlier in the year, the CPI had been performing well, remaining below the 3% lower limit of the South African Reserve Bank’s (SARB) target band.
The union said in a statement that the main contributors to the higher inflation rate include food and non-alcoholic beverages, which increased to 5.7% year-on-year in July, along with housing and utilities. Additionally, basic goods and services contributing to the CPI, such as electricity and water tariffs, surged well above the SARB’s target band, as did fuel prices.
UASA's spokesperson Abigail Moyo said the rising inflation rate has a significant impact on consumer purchasing power.
“While economic observers anticipate some relief later this year, it is unfortunate that South Africans continue to feel the financial strain as the prices of everyday food items, essential goods, and services continue to rise.
“UASA is particularly concerned about the hikes in municipal, electricity, and water tariffs. The recent increases imposed on these services have had a substantial impact on consumers who rely on them daily.”
She said the union believed that the government and relevant stakeholders needed to consider the cost-of-living crisis when imposing tariff hikes.
“Hurting consumers financially will not resolve the revenue losses nor rectify the financial challenges faced by State-Owned Enterprises (SOEs). Consumers should not be used as a solution to address the government’s shortcomings.
“Despite this troubling inflation situation, we hope that the SARB will show leniency towards consumers and consider cutting interest rates in the future,” Moyo said.
Meanwhile debt management company DebtBusters’ Q2 2025 Debt Index revealed that 95% of people who applied for debt counselling during the quarter had a personal loan. A further 54% had one-month (payday) loans.
Benay Sager, executive head of DebtBusters, explains that while interest rate reductions are welcome, expensive, high-interest personal loans are placing consumers under very real pressure.
“The average interest rate for unsecured debt is at 23% per annum. While lower than before, this rate is not possible to service for several years at a time.”
Sager says the compounding effect is clear. The median debt-to-annual-income ratio has increased to 112% after declining for most of 2024. Further, the share of income required to service debt has increased to 70%, the highest level since 2017.