Cost of living crisis: Medical aid costs up 43%, food prices soar
It is indeed very good news that the inflation rate remained below the midpoint of the South African Reserve Bank’s inflation range of 3% to 6% for the fifth consecutive month in December 2024, and that it has stayed within the range for the last 19 months.
However, this only means that the cost of living is increasing at a slower pace.
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The very high prices for most foods and other costs to provide for a family are still putting strain on households.
Increase in Consumer Price Index over five years
Source: Stats SA CPI report December 2024
Most consumers can list several examples of their favourite or essential food items that are way more expensive than a few years ago.
Eggs are still hovering at record prices after a vicious strain of avian flu killed millions of chickens in the second half of 2023.
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A jar of decent coffee has doubled in price. Cheese is nearly unaffordable, and a bottle of acceptable red wine has jumped from R65 to R90 over two years.
Five years at a glance
Statistics SA has kindly provided the consumer price index (CPI) figures going back to 2008, all indexed to the new base year of 2021 – enabling an analysis over a longer period than just a month or a year.
The exercise proves that people are right when joking that pensioners are stronger than a few years ago, today being able to carry R500 worth of groceries in one hand.
Comparing the figures of December 2024 to those of December 2019, the headline CPI of all items in urban areas has increased by nearly 27% over five years. Much worse, food prices increased by close to 40% since the end 2019.
The main drivers of the increase in food prices were the categories for cooking oil and similar products; hot beverages; sugar, sweets and desserts; milk, eggs and cheese; bread and cereals; vegetables; and fish. The price of hot beverages has increased by 54% over five years.
Stats SA mentioned in one of its inflation reports a while back that the increase in the category for hot beverages was as a result of the sharp increase in the price of coffee. The price of coffee beans has increased worldwide.
| Consumer Price Index over five years | |||
| Index (base year: 2021 = 100) | Dec 2019 | Dec 2024 | Change |
| Headline CPI | 91.6 | 116.1 | 26.7% |
| Electricity and other fuels for household use | 82.7 | 139 | 68.1% |
| Cooking oils and fats | 75.1 | 117.8 | 56.9% |
| Hot beverages | 93.5 | 144.2 | 54.2% |
| Sugar, sweets and deserts | 89.1 | 137.4 | 54.2% |
| Milk, eggs and cheese | 89.3 | 128.5 | 43.9% |
| Bread and cereals | 93.5 | 134.4 | 43.7% |
| Processed food | 89.1 | 127.7 | 43.3% |
| Medical insurance | 86.2 | 123.5 | 43.3% |
| Vegetables | 94.9 | 132.8 | 39.9% |
| All food items | 88.9 | 124.4 | 39.9% |
| Education | 88.6 | 122.8 | 38.6% |
| Non-alcoholic beverages | 94.3 | 129.4 | 37.2% |
| Unprocessed food | 88.8 | 121.3 | 36.6% |
| Insurance | 88.3 | 119 | 34.8% |
| Fish | 91.6 | 123.4 | 34.7% |
| Books, newspapers and stationery | 92.2 | 124.2 | 34.7% |
| Fuel | 80.6 | 107.5 | 33.4% |
| Wine | 88.4 | 117.9 | 33.4% |
| Water and other services | 90.4 | 120 | 32.7% |
| Meat | 85.8 | 113.5 | 32.3% |
| Fruit | 90.5 | 118.9 | 31.4% |
| Primary and secondary education | 90 | 118.2 | 31.3% |
| Miscellaneous goods and services | 89.6 | 117.6 | 31.3% |
| Dentists | 91.5 | 119.3 | 30.4% |
| Education, including boarding | 90.3 | 117.5 | 30.1% |
| Alcoholic spirits | 92.7 | 120.1 | 29.6% |
| Purchase of vehicles | 91.2 | 118.1 | 29.5% |
| Tertiary education | 90.8 | 116.2 | 28.0% |
| Personal care | 96.8 | 123.8 | 27.9% |
| Cold beverages | 94.7 | 120.9 | 27.7% |
| Restaurants | 94 | 119.8 | 27.4% |
| Medical doctors | 92.3 | 116.4 | 26.1% |
| Financial services | 88.9 | 112.1 | 26.1% |
| Tobacco | 91.4 | 114.9 | 25.7% |
| Medical products | 92.4 | 116.1 | 25.6% |
| Hospital services | 93.2 | 114.9 | 23.3% |
| Beer | 94 | 115.3 | 22.7% |
| Hotels | 101.7 | 120.7 | 18.7% |
| Actual rentals for housing | 97.7 | 108.7 | 11.3% |
| Recreation and culture | 97 | 107.9 | 11.2% |
| Clothing and footwear | 98.1 | 106.9 | 9.0% |
| Recreational equipment | 94.8 | 103.2 | 8.9% |
| Appliances, tableware and equipment | 98.8 | 104.1 | 5.4% |
| Communication | 101.1 | 98.9 | -2.2% |
| Furnishings, floor coverings and textiles | 101.3 | 99 | -2.3% |
| Telecommunication equipment | 119.7 | 73.9 | -38.3% |
Source: Data supplied by Stats SA
Sugar, sweets and desserts have increased by 54% over five years, and milk, eggs and cheese by 44%.
The prices of bread and cereals, staple foods for the majority of South Africans, increased by 44% over the period.
The CPI survey includes the wages of domestic workers as a household cost, which shows that people who are probably dependent on bread and cereals saw their income increase by less than 20% over the same period.
Average meat prices have increased by more than 32% since 2019 and those of fish by nearly 35%.
Interestingly, a local supermarket had tilapia – a fish grown in many back yards by adding organic material to the water to promote algae growth – in the fridge at R280 per kilogram recently.
Medical
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Another set of prices that hit consumers hard is that of medical services and products.
This comes with an interesting twist in that the cost of medical insurance increased markedly faster than the cost of the underlying medical care itself.
The price of medical insurance has increased by 43% since December 2019, according to the Stats SA figures. Dentists apparently upped their prices by 30% and doctors charged 26% more.
Read: The growing burden of medical aid on South Africans
The prices of medical products increased by 26% and the cost of hospital services by 23%.
Education
Households also have to fork out much more for education – which is an absolute necessity given that unemployment statistics show that those with a good education have a much better chance of getting a job among more than eight million unemployed people actively searching for work.
Read: Buckle up, parents: School fee hikes outpace inflation
Primary and secondary education costs 31% more than five years ago and tertiary education 28% (for those who pay).
Electricity
The worst of all the price increases for households since 2019 is that of the monthly electricity bill.
The price of electricity and other fuel for household use (presumably gas) increased the most by far, with the average household paying nearly 70% more for electricity than five years ago – largely due to huge price increases by Eskom.
Businesses, as final consumers of electricity, obviously saw their electricity cost increase at the same rate. This will feed into the cost of all products for consumers, and will continue to fuel inflation as long as Eskom increases its prices.
Read/listen: Do we manifest our own inflation?
At the other end of the spectrum, the Stats SA figures show that people should be able to afford to dress better in that the prices of clothing and footwear increased by only 10% over five years.
They can relax more too. The cost of recreation equipment increased by 9% over five years, and being able to tell their friends about a nice weekend away actually costs less than it did in 2019.
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