Debt counselling groups warned that the sudden inflation spike could have severe consequences for consumers already battling high living costs, expensive credit, and stagnant income growth.
Neil Roets, CEO of Debt Rescue, said the rapid increase in inflation was particularly concerning because it was being fuelled by factors largely beyond consumers’ control.
“We are extremely worried about the impact this is going to have on already financially stretched households, especially against the backdrop of growing expectations that the Reserve Bank may increase interest rates again next week.”
Roets warned that South Africans had endured relentless financial pressure over the past two years, including rising electricity tariffs, food inflation, insurance costs, transport expenses and elevated borrowing costs.
The latest inflation jump was intensified by a sharp increase in fuel prices as conflict involving Iran disrupted global energy markets. Fuel prices surged 18.2% month-on-month and 11.4% year-on-year in April, placing renewed strain on transport and logistics costs across the economy.
Roets said the ripple effects would extend far beyond petrol stations.
“These are the kinds of increases that filter through the entire economy. When fuel rises, the cost of transporting goods rises. Public transport fares increase. Food distribution becomes more expensive. Delivery costs rise. Consumers end up paying more for almost everything.”
He added that for the average household, there is very little flexibility left in monthly budgets to absorb another wave of increases.
“Many consumers are already using credit simply to survive the month. Others are cutting back on groceries, delaying medical treatment, or falling behind on essential accounts to prioritise bond repayments and vehicle finance.”
Analysts said the inflation spike increased the likelihood that the South African Reserve Bank could raise interest rates at its upcoming Monetary Policy Committee meeting in an effort to contain inflationary pressures.
Roets cautioned that even a modest 25-basis-point increase would worsen affordability pressures for consumers servicing home loans, vehicle finance and personal debt.
“Consumers are exhausted. Many feel trapped in a cycle where their income is no longer keeping pace with the real cost of living. The fear and uncertainty around what comes next is becoming a major issue in itself.”