Inflation is easing, real take-home pay just posted its first monthly gain in nine months and the average food basket got slightly cheaper in August. By the usual measures, South Africa’s economy is having a better month.
None of it has, however, bought households much of a margin for error.
That is the real story sitting underneath the improving headlines: not that the numbers are fake, but that the improvement remains too thin to have materially rebuilt household financial resilience.
A household does not need to be poor to be financially vulnerable. It just needs to have spent the last two years absorbing costs it never got to recover from.
Take the middle-class South African who described their own finances as being “a pay cheque away from being on the streets”. They have a good car, a comfortable rental, no savings equivalent to a month's salary, groceries sometimes going onto a credit card and only a small pension for retirement.
That is not a poor household by any means but also not a financially resilient one either.
A 2026 Budget Insurance Financial Health Survey of more than 2,700 South Africans found that 48% of lower-middle-income earners and 45% of upper-middle-income earners said they could not afford to actively save for the future.
Among respondents earning R40,000 or more a month, 57% said they were actively saving.
The figures do not suggest that a household earning R40,000 or R70,000 a month faces the same circumstances as a household living on R5,000. They show something narrower but important: income alone is no longer a reliable measure of financial resilience.
For households carrying rent or a mortgage, vehicle finance, school fees, insurance, healthcare, food, fuel and municipal costs, a substantial income can still leave relatively little cash available at the end of the month.
The July numbers make that gap visible rather than close it.
The PayInc Net Salary Index, which tracks the take-home pay of approximately 2.1 million South African salary earners, showed real net salaries rising 0.4% in July. This is the first monthly increase in nine months.
But real pay remained 2.2% below its level a year earlier.
The average nominal net salary rose to R21,642 in July, up 0.2% from June and 2.2% from a year earlier.
Consumer inflation, meanwhile, moderated to 4.3% in July from 5% in June.
The easing is also showing up earlier in the price chain. Statistics South Africa's latest Producer Price Inflation data showed annual inflation for final manufactured goods falling to 5.7% in July from 7.5% in June, while producer prices declined 1% month on month.
That suggests some of the pressure facing businesses at the factory gate is easing as well as the pressure being measured in consumer prices.
Elize Kruger, an independent economist, said the continued increase in nominal net salaries was encouraging, but salary growth remained subdued.
“South African households continue to navigate a challenging economic environment, making the recovery in purchasing power particularly important for consumer confidence and spending.”
Kruger said the moderation in inflation had contributed to the first monthly improvement in real net salaries in nine months.
“However, purchasing power remains weaker than a year ago.”
Meaning that 0.4% monthly improvement does not restore purchasing power already lost over the preceding months.
Food prices are falling, but the relief is small
The latest Household Affordability Index from the Pietermaritzburg Economic Justice and Dignity Group shows a similar pattern.
The average Household Food Basket fell by R50.72, from R5,530.52 in July to R5,479.80 in August. But it was still R99.18, or 1.8%, more expensive than a year earlier.
And the headline decline conceals increases in individual staples. PMBEJD said potatoes, beef and butternut increased by 5% or more in August, while onions, chicken gizzards, beef tripe, fish, peanut butter and brown bread increased by 2% or more.
Mervyn Abrahams, director of PMBEJD, said the minimum shortfall on food for a worker's family was 56.2%, amounting to R2,120.86 on a nutritional basket costing R3,774.21.
Siyanda Baduza, a basic income researcher at the Institute for Economic Justice, said the R50 reduction was meaningful, particularly for poor households, but did not reverse the increases that came before it.
“In the two months prior, the basket went up by over R70. So while significant, it doesn't necessarily reverse the period of high prices, which households have had to shoulder with very few buffers.”
This makes the distinction between prices falling and affordability improving clearer.
The savings buffer is missing
The problem becomes clearer when household savings and credit are considered.
Wonga's survey of 4,872 respondents found that 81.5% did not have immediate access to savings equivalent to one month's salary.
The survey is not directly comparable with the PayInc index: PayInc measures the take-home pay of approximately 2.1 million salary earners, while Wonga's figures come from its own survey respondents.
But its findings provide another indication of the financial pressure experienced by the consumers surveyed.
Some 41% said they use credit every month to cover essentials including groceries, transport and electricity.
A further 51% said they use credit to deal with unexpected emergencies such as medical expenses and repairs.
Tina Manyanya, spokesperson at Wonga, said the findings showed many consumers were unable to meet basic needs without relying on credit.
“This creates a dangerous cycle of debt reliance and over indebtedness, which fosters an environment where people are not empowered to save or plan.”
The survey also found a sharp increase in the use of informal lenders.
Thirty-two percent of respondents said they had borrowed from informal lenders, commonly known as mashonisas, during the previous 12 months, compared with 15% in Wonga's comparable 2025 survey.
Some 68% said they had been declined by a formal credit provider, while 54% attributed this to a low credit score.
Among respondents who had borrowed from informal lenders, 85% said they did so because their credit score was too low.
Manyanya said being rejected by formal lenders did not remove the need for credit.
“Being denied access to credit does not stop people needing it. Being credit dependent but not being able to access it through regulated channels, instead drives people into the arms of informal lenders.”
“The danger is that they are then trapped in a dangerous cycle of increasing debt.”
This is a very different population from the middle-income households highlighted by the Budget Insurance research, and the two sets of findings should not be conflated.
But together they illustrate two different parts of the same household-finance problem: some consumers cannot build savings, while others are increasingly turning to credit when savings are unavailable.
Debt is another pressure point
Neil Roets, CEO of Debt Rescue, said the combination of fuel, food and municipal cost increases had contributed to a deeper consumer debt crisis.
“The fact is, people are simply unable to make ends meet every month, and are using their store and credit cards to fill the gap.”
“The sad fact is, every additional rand spent servicing debt is a rand that is no longer available for groceries, transport or other household necessities,” he added.
Around 51% of Wonga respondents said they had some form of retirement, provident or pension savings.
That highlights a distinction that is easy to miss: having long-term retirement savings does not necessarily mean having enough accessible cash to deal with an emergency.
A household can be putting money away for retirement while simultaneously using credit to get through the month.
Turning improvement into purchasing power
The broader wage picture remains mixed.
According to SARB data cited by PayInc, average private-sector salary increases moderated to 4% in 2025, from 4.1% in 2024 and an average of 5.4% in both 2022 and 2023.
Public-sector remuneration increased considerably faster, with average increases of 8.6% in 2025 and 9.1% in 2024.
Kruger said businesses under pressure on profitability had less scope for meaningful salary increases.
Professor Waldo Krugell, an economist at North-West University, said lower and stable inflation could help preserve purchasing power when salary growth was weak.
“When nominal salaries are not growing fast because the economy is not growing fast, low and stable inflation at least means that buying power is being maintained.”
But he cautioned that the improvement could be short-lived, with further fuel price increases expected.
That leaves South Africa with an unusual economic picture.
The headline indicators are improving with recovery showing up in the economic data before it is showing up in household bank accounts.
ashley.lechman@nationalmg.co.za
yogashen.pillay@nationalmg.co.za
vivian.warby@nationalmg.co.za