January 2026 household food basket price 0.6% lower than last year

The Pietermaritzburg-based social justice group has found that food was slightly cheaper at the end of the past year compared to prices from the previous two years.

The Pietermaritzburg Economic Justice and Dignity Group attributes this to the country’s positive economic trajectory that could lead to a more stable and manageable cost of living for residents. However, they emphasised that clear indicators on whether the positive signs in the country’s economy are having an impact on daily lives will show in the coming months.

The group was commenting after recent positive reviews of the economy, which pointed out that financial market indicators have been encouraging.

Economists point to the rand strengthening against other major currencies as one of the positive steps indicating strength for the economy. They said the rand broke through the psychological R15.70/US$1 level on 29 January, with the local unit strengthening by approximately 5.5% against the US dollar.

Mervyn Abrahams, Director of the Pietermaritzburg Economic Justice and Dignity Group, noted the economic volatility brought about by world events at the start of the year and how investors have looked to gold as a safe haven during these moments of uncertainty.

“Prospects for economic growth in South Africa this year are very encouraging considering how tough the last couple of months have been for the average consumer, particularly for the low-income-earning workforce,” he said.

Analysing the economic indicators in relation to the needs of the public, he stated that the December food basket, which looks at 44 essential food items, showed that the price was R5,333.45. More importantly, it showed a decrease of R80.08 when compared to November and R49.93 when compared to December 2023.

“Our January 2026 Household Affordability Index illustrates that the food basket cost R5,401, representing a R67.99 (1.3%) increase when compared to December. However, perhaps more encouragingly, it recorded a R32.26 decrease, which amounts to a (0.6%) decrease when compared to the same time last year.”

“Considering all of the above, and although it is a bit early, we hope that the strengthening of the rand and the continued positive outlook for the country’s future will lead to stability and investment in the economy, creating jobs where workers can earn enough to look after their families and ensure that food security in their households is not compromised,” he said.

Economist Dawie Roodt said things are likely to get much better as the financial economy trickles down to the real economy, adding they would get better much faster if the country were to address some of the administrative and policy challenges seen as threats to investment.

“We must distinguish between the financial market and the real economy. The financial market has been positive, and that will trickle down to the real economy. The real economy refers to the sectors where we produce goods, such as factories. The challenge is that people are not going to start building factories overnight because of policy issues and calling authorities. However, the financial economy will trickle down to the real economy.”

Frank Blackmore, Lead Economist at KPMG South Africa, noted a number of promising signs in the economy. “Growth is forecast to be slightly faster this year than last year and well above the 1% level, which is a vast improvement on the average of 0.7% experienced over the previous decade.”

Anchor Capital stated that domestic developments have become increasingly supportive of the rand. In a statement, the organisation said, “Lower oil prices and elevated gold and platinum exports have materially improved South Africa’s terms of trade, boosting the fiscus. South Africa’s November trade surplus rose to R37.7 billion, the largest since March 2022, reflecting a strong export performance.”

It noted that improved electricity supply, better logistics outcomes (including improved rail performance, increased container volumes, and stronger public-private collaboration), and the resilience of the Government of National Unity (GNU) have also helped lift business confidence.

The IFP also weighed in on the matter, saying that while the economic indicators are positive, more decisive and coordinated government action is needed to ensure that economic relief trickles down to residents.

“The IFP recognises the positive signals emerging within the economy but maintains that significantly more must be done to unlock inclusive growth, boost investment, and protect vulnerable households,” the party said.

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