Aug 2026 · Inflation Monitor · South Africa
South Africa's Middle-Income Inflation Monitor
Inflation for the Urban Middle Class (Deciles 4-7)
Section 1 · Headline snapshot
The middle-income inflation story this month
| Aug 2026 | Jul 2026 | Δ MoM Δ MoM — Month-on-Month change The percentage point change from month-to-month. | |
|---|---|---|---|
| PBC Middle-Income CPI CPI — Consumer Price Index Stats SA’s Consumer Price Index. The official measure of how much the prices of a representative basket of goods and services bought by South African households have changed over time. Published monthly by Stats SA. , Deciles 4-7 Deciles 4-7 Classification selected from Stats SA’s ten (10) deciles. See Methodology. ( % Yr YoY % — Year-on-Year change The percentage change in a price index compared with the same month one year ago. The standard way to read inflation. YoYₜ = (valueₜ ÷ valueₜ₋₁₂ − 1) × 100 ) | 3.5% | 3.5% | +0.0 ppt |
| National Headline CPI National Headline CPI Headline consumer price index (CPI) for all urban areas in South Africa. (% Yr) | 4.4% | 4.3% | +0.1 ppt |
| Middle-Income Premium ( ppt ppt — percentage points Percentage points — the arithmetic difference between two percentages. If inflation moves from 5.0% to 5.4%, that is +0.4 ppt — not +0.4%. ) | -0.8 ppt | -0.8 ppt | — |
- South Africa’s Middle‑Income Inflation Indicator (Deciles 4-7) held steady at 3.5% y/y in August 2026, while National Headline CPI edged up by 0.1ppt to 4.4% — 1.4ppt above the SARB’s 3%-point target.
- The Middle-Income Premium — the gap between Middle-Income CPI and National Headline CPI — stabilised at -0.8 ppt for the third consecutive month. Elevated fuel pump prices have disproportionately affected more affluent households, but we expect the structural Middle-Income Premium to re-emerge once the fuel price shock recedes.
- The Middle-Class Squeeze Indicator (Core Necessities Indicator − Non-Essentials Indicator) was unchanged at 1.1ppt, as both subindices stabilised.
- The SARB raised its policy rate by 25 basis points to 7.25% unanimously. This is a significant and consequential policy development for middle-income households.
Long-run, % year-on-year
A. PBC Middle-Income CPI (Deciles 4–7) vs National Headline CPI
Section 2 · Sub-index breakdown · PBC Middle-Income CPI (D4–D7)
PBC Core Necessities Index (CNI)
PBC Core Necessities Index (CNI)
Food, Housing & Transport Inflation
CNI
3.7%
JUL 2026
JUL 2026
3.7%Yr
+0.1 ppt
AUG 2026
PBC Semi-Essentials Index (SEI)
PBC Semi-Essentials Index (SEI)
Health, Education & Insurance Inflation
SEI
5.3%
JUL 2026
JUL 2026
5.3%Yr
-0.1 ppt
AUG 2026
PBC Non-Essentials Index (NEI)
PBC Non-Essentials Index (NEI)
Covers non-essential / discretionary items
NEI
2.6%
JUL 2026
JUL 2026
2.6%Yr
+0.0 ppt
AUG 2026
- Our Core Necessities Index (CNI) — tracking food, housing, and transport — and Non-Essentials Index (NEI) stabilised in August. The NEI's stable 2.6% y/y masked the services inflation pressures that the SARB is watching closely. Services inflation is elevated at 5.1% y/y, with many underlying categories currently sitting well above the 3% inflation target.
Section 3 · Middle-Income Squeeze Indicator
Essentials inflation outpaces non-essentials inflation
Squeeze indicator (CNI − NEI)
3.7%
−
2.6%
= +1.1 ppt
AUG 2026
Long-run, % year-on-year
C. The Middle-Class Squeeze Indicator (CNI − NEI)
Sources: Statistics South Africa. PBC calculations.
