Data Sources
Price Data. All underlying price indices — including headline CPI and its components (food, transport, fuel, housing, etc.) — are sourced from Statistics South Africa's monthly Consumer Price Index releases (P0141).
Fuel Price Data. Pump price data (diesel 500ppm, petrol 93 and 95 unleaded) sourced from the Automobile Association's monthly fuel price tracker, alongside National Treasury communiqués on fuel levy relief measures.
Expenditure Weights. Weights for constructing the Deciles 4–7 index are derived from Stats SA's official "CPI per expenditure decile" data, based on the 2022/23 Income and Expenditure Survey (IES). For this analysis, weights for deciles 4, 5, 6, and 7 were aggregated to represent the middle-income group.
Index Construction
2.1 The middle-income (Deciles 4–7) CPI
The middle-income (Deciles 4–7) CPI is calculated by reweighting the official CPI component indices according to the expenditure patterns of the middle-income group. The year-on-year inflation rate is derived as follows:
These weights reflect each category's share of aggregate household expenditure for the middle-income group, ensuring the index is representative of their consumption patterns.
2.2 Sub-Indices
To analyse distributional price pressures, three subgroup indices were constructed:
Food & Non-Alcoholic Beverages, Housing & Utilities, Transport.
Health, Education, Insurance.
All remaining categories.
Each sub-index is calculated as a weighted average of its constituent categories' inflation rates, using their within-group expenditure shares.
Stats SA's Expenditure Deciles
Stats SA divides South Africa's urban population into 10 expenditure deciles, each representing 10% of households ranked by total monthly expenditure. This classification allows for detailed analysis of how price changes affect households across the income spectrum.
The table below shows the official CPI weights (as a percentage of the national CPI basket) for each decile, based on the 2023 weight update. The four middle deciles (D4–D7) — our middle-income focus — are highlighted.
| Decile | Monthly expenditure band | CPI weight |
|---|---|---|
| D1 | Up to R35 864 | 0.71% |
| D2 | R35 865 – R51 168 | 1.31% |
| D3 | R51 169 – R64 855 | 1.85% |
| D4 Middle | R64 856 – R80 320 | 2.54% |
| D5 Middle | R80 321 – R97 976 | 3.30% |
| D6 Middle | R97 977 – R120 028 | 4.42% |
| D7 Middle | R120 029 – R150 774 | 6.23% |
| D8 | R150 775 – R202 419 | 8.89% |
| D9 | R202 420 – R307 885 | 15.03% |
| D10 | R307 886 and more | 55.72% |
Source: Statistics South Africa, CPI 2023 Weights (P0141.5).
The Deciles 4–7 group — comprising the four middle expenditure deciles — represents the core of South Africa's urban middle class. These households fall between the bottom 30% and top 30% of the expenditure distribution, capturing what is often described as the "lower-middle" to "middle-middle" income segment.
By constructing a weighted CPI index for Deciles 4–7, we isolate inflation pressures experienced by this economically significant and policy-relevant group, separate from the often-divergent experiences of the lowest-income and highest-income households.
Decile 4–7 Weight Structure
Category shares within the middle-income basket, derived from the 2023 CPI weight update.
| Category | Weight |
|---|---|
| Food & Non-Alcoholic Beverages | 30.5% |
| Housing & Utilities | 27.3% |
| Transport | 8.3% |
| Insurance | 5.3% |
| Clothing & Footwear | 5.7% |
| All other categories | 22.9% |
| Total | 100.0% |
Survey Schedule
Stats SA's survey cadence for items that are not collected monthly.
| Frequency | Survey months | Items |
|---|---|---|
| Quarterly | Jan, Apr, Jul, Oct | Gymnasium fees (Recreation & culture); Funeral expenses, funeral policies, gravestone maintenance (Misc) |
| Feb, May, Aug, Nov | Private-sector hospitals (Health); Rugby tickets, Cricket tickets (Recreation) | |
| Mar, Jun, Sep, Dec | Actual rentals, owners' equivalent rent (Housing & utilities); Domestic workers' wages (Household contents); Taxi & train fares (Transport); Motor vehicle insurance (Misc) | |
| Biannual | Jan, Jul | Building insurance, household content insurance (Misc) |
| Feb, Apr | Medical aid (Misc) | |
| Apr, Oct | Television licences (Recreation & culture) | |
| May, Nov | Electricians, plumbers (Housing & utilities) | |
| Jul, Aug | Municipal charges for water, property rates & electricity (Housing & utilities) | |
| Annual | January | Post box rental (Communication); Lotto tickets (Recreation) |
| February | Private-sector doctors & dentists (Health) | |
| March | School & university tuition fees (Education); Toll fees (Transport); University boarding fees (Restaurants & hotels); Crèche fees (Misc) | |
| April | Public-sector hospitals & doctors (Health); Stamps (Communication) | |
| Other | Jan, Mar, Apr, Jun, Jul, Sep, Oct, Dec | Local bus fares (Transport) |
Source: Statistics South Africa.
Key Assumptions & Limitations
- Experimental Index
- This constructed index is for analytical purposes only and is not an official statistic published by Stats SA.
- Weight Currency
- Decile expenditure weights are based on survey data (IES 2022/23). If the survey is not the most recent, weights may not fully reflect current spending patterns.
- Within-Group Homogeneity
- The index assumes uniform spending patterns within each decile and across the combined middle‑income group, which may not capture the full diversity of individual households.
- Price Coverage
- The index relies on the same price collection and item coverage as the official CPI, which may not perfectly match the consumption basket of every middle‑income household.
- Driver Analysis
- Observations about inflation drivers (e.g., housing, food, transport) are based on the relatively higher expenditure weights these categories hold in the decile data.
- Second-Round Effects
- References to second-round pass-through in Section 4 are based on observed correlations between transport-exposed categories and the timing of the fuel shock. These are analytical observations, not formal econometric pass-through estimates.
- Headline CPI Dominance
- National headline inflation is dominated by higher‑expenditure deciles, which carry larger weights in the aggregate basket. This can lead to divergence between middle‑income inflation and the official headline rate.
Disclaimer
This analysis and the derived indices are intended for informational and research purposes. They should not be used as a basis for formal policy decisions, wage negotiations, or financial indexation without further validation and expert consultation. The author bears no responsibility for decisions made using this data.
References
- Oosthuizen, M. (2007). Consumer Price Inflation across the Income Distribution in South Africa.
- Statistics South Africa. Consumer Price Index: July 2026 (Statistical Release P0141). Retrieved from www.statssa.gov.za.
- Statistics South Africa. Consumer Price Index: 2023 Weights (Statistical Release P0141.5). Retrieved from www.statssa.gov.za.
- Statistics South Africa. Income and Expenditure Survey (IES) 2022/23, Retrieved from www.statssa.gov.za.