ActionSA appealed to South African Reserve Bank (SARB) Governor Lesetja Kganyago to reduce the interest rate by 50 basis points (bps) at the upcoming Monetary Policy Committee meeting.

ActionSA Member of Parliament Alan Beesley said a reduction greater than the anticipated 25 bps would provide much-needed relief to financially stretched households and struggling businesses.

The party welcomed the latest inflation data released by Statistics South Africa (Stats SA) on Wednesday, showing that annual consumer price inflation dropped to 2.8% in October, its fifth consecutive monthly decline.

“While this is a positive development, this brings little respite to already distressed households. As such we continue to urge the government to implement bold economic reforms to mitigate the persistent financial distress experienced by South African households despite easing food prices,” said Beesley.

Stats SA pointed out that falling fuel prices were the primary driver of the slowdown in the headline rate from 3.8% in September.

Beesley highlighted that the latest data showed annual food inflation at 3.6%, falling below the party’s benchmark of 4% for the first time since the formation of the Government of National Unity (GNU).

“…rising food prices disproportionately affect the most vulnerable in society, and ActionSA’s GNU Performance Tracker uses this metric to measure whether the government is prioritising the livelihoods of all South Africans. We welcome this progress but caution that the financial crisis facing South African households remains acute,” he said.

Beesley pointed to a report by South African Revenue Service, which indicated that more than R35-billion had been withdrawn under the two-pot pension system since its introduction on September 1, saying this highlighted the extent of financial strain.

“Alarmingly, more than 41 000 applicants were declined withdrawals because they lacked sufficient funds in their pension savings, underscoring the precariousness of many families’ financial situations,” he stated.

Moreover, looming threats such as Eskom’s proposed 36% tariff increase for next year risked eroding any disposable income gains from reduced food prices, he stated.

Beesley explained that without meaningful economic growth, these short-term improvements would do little to raise the living standards of the majority.

“The pedestrian GDP growth rates projected in the Medium-Term Budget Policy Statement —1.1% for the current year and an average of 1.8% over the next three years—are wholly inadequate. It is no longer enough to talk about bold reforms; what is needed is decisive action,” he said.