What is the Consumer Price Index (CPI)?
Complete guide for South African residents
Last updated: December 2025
Quick Facts About CPI
- CPI measures how prices change over time in South Africa
- Current inflation rate: 3.6% as of October 2025
- CPI affects your wages, grants, and living costs
- Statistics South Africa (Stats SA) calculates CPI monthly
- SARB target: Keep inflation between 3% and 6%
Table of Contents
What is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) measures how prices change in South Africa. Think of it as a tool that tracks what you pay for everyday items.
Statistics South Africa (Stats SA) checks prices every month. They look at hundreds of products and services that South Africans buy.
When CPI goes up, it means things cost more than before. This is called inflation. When things cost more, your money buys less.
In 2024, bread cost R15. In 2025, the same bread costs R16. The CPI measures this R1 increase across all products you buy.
Who Uses CPI:
- Government decides SASSA grant increases based on CPI
- Employers use CPI to adjust salaries each year
- South African Reserve Bank (SARB) controls interest rates using CPI
- Unions negotiate wage increases using CPI numbers
✅ How CPI Works
Stats SA follows a simple process each month:
Step 1: Choose the Basket
Stats SA picks common items South Africans buy. This is called the “CPI basket.” The basket has 391 products and services.
Step 2: Check Prices
Every month, workers visit shops, markets, and service providers. They record prices for all items in the basket.
Step 3: Calculate Changes
Stats SA compares this month’s prices to last month. They also compare to the same month last year.
Step 4: Publish Results
Stats SA announces the inflation rate. This tells you how much prices increased overall.
What’s in the CPI Basket? (2025 Update)
Stats SA updated the CPI basket in January 2025. Here are the main categories and their importance:
| Category | Weight (%) | What This Means |
|---|---|---|
| Housing & Utilities | 24.1% | Rent, electricity, water, rates |
| Food & Drinks | 18.2% | Groceries, meat, vegetables, bread |
| Transport | 13.9% | Petrol, taxi fares, car costs |
| Insurance & Financial Services | 10.4% | Medical aid, bank fees, insurance |
| Information & Communication | 5.5% | Airtime, data, internet, phones |
| Other Categories | 27.9% | Clothing, education, recreation |
What’s New in the 2025 Basket:
- E-hailing services (Uber, Bolt)
- Streaming services (Netflix)
- Power banks and charging cables
- School transport services
- Chicken nuggets and ready meals
- Basmati rice
- Landline telephone fees
- Satellite TV decoders
- Frozen potato chips
- Condensed milk
- Ground coffee beans
- Public sector GP visits
Stats SA adds new items to match how South Africans actually spend money. More people use Uber now, so it’s included. Fewer people use landlines, so they’re removed.
📊 Current CPI Rates for 2025
Here are the latest inflation rates for South Africa:
| Month | Overall Inflation | What Changed |
|---|---|---|
| October 2025 | 3.6% | Highest since Sept 2024 |
| September 2025 | 3.4% | Rising electricity costs |
| August 2025 | 3.3% | Food prices slowing |
| June 2025 | 3.0% | Below SARB target midpoint |
Category-Specific Inflation (October 2025):
- Electricity: 8.2% increase (very high)
- Water: 7.0% increase
- Food: 3.9% increase
- Alcoholic Beverages & Tobacco: 4.5% increase
- Transport/Fuel: 3.3% increase (first rise in a year)
Overall inflation is 3.6%, but electricity costs increased by 8.2%. This means your electricity bill is rising much faster than other expenses.
SARB Target Range: The South African Reserve Bank aims to keep inflation between 3% and 6%. The current 3.6% is within this range.
How CPI Affects Your Daily Life
CPI is not just a number. It directly affects your money and how you live:
1. Your Purchasing Power Drops
When CPI increases, your money buys less. R100 today does not buy as much as R100 last year.
In 2024, R500 bought a full grocery basket. With 3.6% inflation, that same basket now costs R518. Your R500 buys less food.
2. Living Costs Keep Rising
Essential costs like electricity, water, and food usually increase faster than overall inflation. This hits poor households hardest.
Key Facts:
- Electricity prices increased 68% in the past 5 years
- Water prices increased 50% in the past 5 years
- Food basket cost R5,413 in November 2025 (up from R5,361 in 2024)
- For poor families, food takes over 40% of their money
3. Wages Don’t Always Keep Up
When CPI increases but wages stay the same, you get poorer. You can afford less even though you work the same hours.
4. Savings Lose Value
If you save R1,000 under your mattress, it buys less next year. Inflation reduces the value of cash savings.
✅ How CPI Affects Wages and SASSA Grants
The good news is that wages and grants increase based on CPI. This helps protect your money from inflation.
Minimum Wage Increases (2025):
| Year | Hourly Wage | Monthly (184 hours) |
|---|---|---|
| 2024 | R27.58 | R5,075 |
| 2025 (from 1 March) | R28.79 | R5,297 |
The 2025 increase was 4.4% (CPI plus 1.5%). This is the formula the National Minimum Wage Commission uses.
Minimum wage increase = CPI rate + 1.5%
Example for 2025: 2.9% (December CPI) + 1.5% = 4.4% increase
SASSA Grant Increases (2025):
In 2025, grants increased twice (April and October) to help with rising costs:
| Grant Type | October 2025 Amount | Increase |
|---|---|---|
| Old Age Grant | R2,190 | R120/month |
| Disability Grant | R2,190 | R120/month |
| Care Dependency Grant | R2,080 | R120/month |
| Child Support Grant | R560 | R20-R30/month |
| SRD Grant | R370 | Court ordered to increase |
Government increased grants by 5.7% to 5.9% in 2025. This is higher than CPI to give extra help.
In January 2025, the Pretoria High Court ordered SASSA to increase the SRD grant in line with inflation. The current R370 is not enough for rising costs.
💰 Real Price Examples: What CPI Means for Your Budget
Let’s look at real costs to see how CPI affects your daily expenses:
1. Household Food Basket (November 2025):
| Item | Cost |
|---|---|
| Average Food Basket (44 items) | R5,413.53 |
| Basic Nutritious Basket (family of 4) | R3,707.08 |
| Increase from 2024 | R91.95 (1.7%) |
2. Electricity Costs (Rising Fast):
Electricity increased 8.2% in October 2025. For 2025/26, NERSA approved a 12.7% tariff increase.
Average household electricity: R2,949/month (2024)
After 12.7% increase: R3,324/month (2025)
You pay R375 more per month!
3. Monthly Budget Reality (Minimum Wage Worker):
| Expense | Amount | % of Wage |
|---|---|---|
| Total Monthly Wage | R5,297 | 100% |
| Electricity & Transport | R3,022 | 57% |
| Money Left for Food | R2,275 | 43% |
| Basic Food Needed (family of 4) | R3,707 | SHORTAGE! |
Even on minimum wage, families cannot afford basic nutrition. After electricity and transport, there’s only R2,275 left. But a family needs R3,707 for proper food. This forces families to underspend on food by over 50%.
4. Food Price Changes (Past 5 Years):
From December 2019 to December 2024:
- Household food basket: Increased from R3,199 to R5,383
- This is a 68% increase in 5 years
- General CPI increased only 26% in the same period
- Food inflation is running much faster than overall inflation
✅ How to Protect Your Money from Inflation
You cannot stop inflation, but you can protect yourself:
1. Know Your Rights for Wage Increases
- National minimum wage must increase yearly based on CPI
- Check that your employer pays the new minimum wage from 1 March each year
- Current minimum wage: R28.79 per hour (2025)
- Report violations to Department of Labour: 0800 030 007
2. Monitor SASSA Grant Increases
- SASSA must announce grant increases annually
- In 2025, increases happened in April and October
- Check your grant amount each time to confirm the increase
- SASSA helpline: 0800 60 10 11
3. Budget Based on CPI Trends
- Electricity and water increase faster than other costs
- Plan for 8-12% annual increases in electricity
- Food prices typically increase 4-5% yearly
- Build a small emergency fund for price spikes
4. Smart Shopping Strategies
- Buy non-perishable items in bulk when on sale
- Compare prices across different stores
- Use group-buying platforms for wholesale prices
- Focus on nutritious, affordable foods (beans, lentils, seasonal vegetables)
- Cook at home instead of buying ready-made meals
Making umphokoqo (crumbly pap) at home costs R8 per meal. Buying ready-made costs R25. Save R17 per meal by cooking yourself.
5. Use Digital Tools to Track Spending
- Many banks offer free budgeting apps
- Track where your money goes each month
- Set spending limits on categories
- Review your budget monthly as prices change
6. Protect Cash Savings
- Don’t keep large amounts under the mattress
- Open a savings account that pays interest
- Look for accounts with interest above 3.6% to beat inflation
- Consider stokvels for group savings and bulk buying
Where to Find CPI Information
Official Sources:
| Organisation | Contact | What They Do |
|---|---|---|
| Statistics South Africa (Stats SA) | 012 310 8911 www.statssa.gov.za |
Publishes monthly CPI reports |
| South African Reserve Bank (SARB) | 012 313 3911 www.resbank.co.za |
Sets interest rates based on CPI |
| Department of Employment and Labour | 0800 030 007 www.labour.gov.za |
Announces minimum wage increases |
| SASSA | 0800 60 10 11 www.sassa.gov.za |
Announces social grant increases |
When CPI is Announced:
- Stats SA publishes CPI data around the 20th of each month
- The report covers the previous month’s inflation
- Media covers the announcement on TV, radio, and newspapers
- You can read the full report on www.statssa.gov.za
❓ Common Questions About CPI
Q: Why is my electricity bill rising faster than CPI?
A: CPI is an average across all goods and services. Some items (like electricity at 8.2%) rise faster than the average (3.6%). Others rise slower. The average balances them out.
Q: Does my wage have to increase by CPI each year?
A: The National Minimum Wage increases by CPI plus 1.5% by law. For other workers, employers and unions negotiate increases. Many use CPI as the baseline.
Q: Why is food so expensive if CPI is only 3.6%?
A: Food inflation is currently 3.9%, higher than overall CPI. Also, food prices increased 68% over 5 years while general CPI increased 26%. The gap is real and hurts poor families most.
Q: Can I complain if my grant didn’t increase?
A: Yes. All SASSA grants must increase annually. If your amount stayed the same, call SASSA immediately at 0800 60 10 11. Check your bank statement to confirm the amount.
Q: Is 3.6% inflation good or bad?
A: It’s within SARB’s target range (3-6%). It’s better than the 6% we saw in 2023. But even 3.6% means your money loses value each year if wages don’t increase.
Q: Why does Stats SA change the CPI basket?
A: How South Africans spend money changes over time. More people use Uber now, fewer use landlines. The basket must reflect real spending to measure inflation accurately.
Important Terms to Know
CPI (Consumer Price Index): The tool Stats SA uses to measure price changes. Shows how inflation affects what you buy.
Inflation Rate: The percentage that prices increased. If inflation is 3.6%, things cost 3.6% more than last year on average.
CPI Basket: The 391 goods and services Stats SA tracks each month. Includes food, electricity, transport, and more.
Core CPI: CPI without food, fuel, and energy. Shows underlying inflation without volatile items. Currently 3.1%.
Purchasing Power: How much your money can buy. When inflation increases, purchasing power decreases.
Administered Prices: Prices set by government (electricity, water, rates). These often increase faster than market prices.
Headline CPI: The main inflation number that includes all items in the basket. This is the 3.6% you hear on the news.
Base Period: The starting point for CPI calculations. Currently December 2024 = 100. All other months compare to this.
Our Final Recommendations
The Consumer Price Index directly affects your daily life. Understanding CPI helps you make better money decisions and protect yourself from inflation.
Key Takeaways:
- Current inflation is 3.6%, but electricity (8.2%) and food (3.9%) are rising faster
- Your minimum wage and SASSA grants should increase yearly based on CPI
- Electricity and transport take 57% of minimum wage before food
- Food basket costs R5,413 monthly, making proper nutrition hard to afford
- Check Stats SA monthly announcements to track price changes
What You Should Do:
- Verify your wages increased to at least R28.79/hour from 1 March 2025
- Confirm your SASSA grant shows the correct increased amount
- Budget for higher electricity costs (plan for 10-12% annual increases)
- Use smart shopping to stretch your money further
- Save in accounts with interest above inflation rate
Remember: You cannot control inflation, but you can control how you respond to it. Stay informed, budget wisely, and claim all increases you’re entitled to.
Disclaimer: This information is provided for educational purposes and was last updated in December 2025. CPI rates, inflation numbers, and government policies change monthly. Always verify current information with Statistics South Africa (Stats SA) at www.statssa.gov.za or call 012 310 8911. Wage and grant amounts are subject to annual adjustments.
For complaints about wages, contact the Department of Employment and Labour at 0800 030 007. For SASSA grant queries, call 0800 60 10 11. For general consumer protection issues, contact the National Consumer Commission at 0860 003 600.