Middle class feel the squeeze despite GDP rise

SOUTH Africa's middle class is under attack with rising food prices, rates and taxes and ever increasing municipal levies that are forcing middle income households to the brink.

- TRACY-LYNN RUITERS

While Stats SA revealed that Gross Domestic Product (GDP) grew by 0.8% in the second quarter of 2025, some economists said this is not necessarily good news for the middle class.

"For the middle class, I'm afraid this is not good news. And it's not good news because the population is growing at approximately 1.5%. An economy that's growing less than 1% is just not keeping up with population growth," said economist Dawie Roodt.

"So, I'm afraid, no, this is just not good enough. It is slightly better than I've expected, but we need to make some serious changes to all sorts of things in the economy before we can get economy growing at a rate that will support population growth. So, yeah, better than expected, but still not good enough."

Municipalities are relying more and more on middle income households to fund budget shortfalls by increasing rates and taxes and introducing a range of levies. In Cape Town this amount to R4 800 a year in levies, which ratepayer organisations have now taken the City to court for.

Sandra Dickson from activist group STOP COCT said the relentless increases in food, fuel, electricity, and municipal tariffs mean households don't feel any relief, even though the economy grew by 0.8%.

"This is underlined by members of STOP COCT complaining daily how difficult it is to make ends meet and to pay bills. The uncomfortable truth is that while government points to GDP growth as 'progress', ordinary South Africans still face a rising cost of living that outpaces the real benefits of that growth.