The majority of South Africans have tightened their belts so much that many are struggling to breathe, never mind get through to the end of the month.
Many are defaulting on personal loans and other forms of accumulated debt.
As if this were not enough, consumers were this week hit with a double whammy as the prices of fuel and diesel spiked to their highest levels, while the cost of electricity also rose 15%.
For every R500 spent on electricity, consumers will now fork out an additional R75.
The fuel and diesel price hikes will be felt at the pumps immediately, but the long-term cost will be felt in the coming months.
Farmers, who have begun planting or harvesting, will factor the higher price into input costs.
This will drive the price of goods higher.
As most of the country’s food is transported by road, retailers will inevitably be forced to pass on the increases to consumers.
The cycle is destructive and painful for the consumers already reeling from the Covid-19-induced economic depression, an anaemic economic growth forecast and rising unemployment.
Salary increases last year were few and far between, while salary cuts and cost savings were the order of the day.
In real terms, most people experienced a decline in their standard of living.
This is set to continue this year.
For the unemployed, the pain keeps getting worse, with little to no relief in sight.
To add to the woes, the UN’s Food and Agriculture Organisation this week said that world food prices rose for a tenth consecutive month last month, hitting their highest level since June 2014, led by jumps in vegetable oils, meat and dairy.
While the country’s inflation outlook is broadly healthy, food price inflation is spiking.
Without a sound economic growth policy, consumers are going to feel the pressure for some time to come.