FOOD and FUEL: 2025 PRICE projections paint a grim picture

South Africans have experienced substantial hikes in food and fuel prices over the years, a trend that looks likely to continue in 2025.

The cost of fuel directly impacts food prices due to transportation costs, but while petrol and diesel went from nearly R25.70 to bordering the R19.90 mark in seven months, food prices have remained the same.

Forecast for the upcoming year

The Nedbank Economic Group gave their early predictions on what 2025’s food and fuel prices will look like, saying, “The drag came from fuel prices, with petrol and diesel prices down 14.4% yoy and 23.5%, respectively, reflecting the impact of lower global oil prices,

“Food inflation will rise off a low base, further amplified by the impact of the earlier dry weather. Global disinflation will also slow down,” said Nedbank.

“However, improved domestic operating conditions due to stable electricity supply and further efficiency gains in logistics should help contain input costs and operating expenses, which, together with the predictions of higher rainfall will partly mitigate the upside.

“Meanwhile, the stronger US dollar will likely weigh on the rand and other emerging market currencies.”

“The dollar will benefit from the expected change in US economic policies under Donald Trump’s administration, which could lead to sticky global inflation and raise the floor on interest rate cuts.”

“On the domestic front, the threat of electricity tariffs and other administered prices rising more than expected and wages outpacing productivity could also exert pressure. We forecast PPI to average around 4% in 2025.”