Why is the South African Reserve Bank asking businesses more questions?

The South African Reserve Bank, or SARB, is looking beyond the usual economic statistics to understand how inflation is affecting businesses and households.

Official figures such as inflation, growth and employment are important, but they are often released after the events they describe. Businesses, on the other hand, are experiencing these pressures immediately. They can tell the SARB whether fuel, transport, wages and imported goods are becoming more expensive—and whether companies can continue absorbing these costs.

This direct feedback gives policymakers an earlier indication of what is happening in the economy.

What is the link to the conflict involving Iran?

The conflict and wider tensions in the Middle East have pushed up oil prices. For South Africa, this matters because fuel affects far more than the cost of filling a vehicle.

Businesses use fuel to transport goods, operate machinery and deliver products. When their costs rise, they may initially absorb the increase to protect customers and remain competitive. But if high costs continue, businesses eventually have to pass some of them on.

That is when households begin to feel the impact through higher food prices, delivery charges, school transport costs, takeaways and other services.

Business feedback can therefore help the SARB assess how quickly the fuel-price shock is moving through the economy—and whether inflation is likely to remain elevated.

What does the Rule of 72 tell us about inflation?

The Rule of 72 provides a simple way to understand the long-term effect of inflation.

You divide 72 by the inflation rate to estimate how long it may take for prices to double, or for the purchasing power of money to halve.

At 6% inflation:

72 ÷ 6 = 12 years

This means that if inflation stayed at 6% every year, prices could roughly double over 12 years. R100 would then have approximately the purchasing power of R50 today.

At 12% inflation:

72 ÷ 12 = 6 years

In that case, the purchasing power of money could halve in about six years.

This is only a rule of thumb, and different goods increase in price at different rates. But it clearly demonstrates why the SARB wants to keep inflation low and stable. The higher inflation rises, the faster wages, savings and household budgets lose value.

How should households prepare?

Families should review their budgets before the next price increase arrives. Separate essential expenses—housing, food, transport and debt repayments—from spending that can be postponed.

Combining errands, sharing lifts, reducing unnecessary trips and comparing fuel prices can help. Meal planning and reducing food waste are also practical ways to manage rising grocery costs.

Households should be cautious about using expensive credit to cover everyday expenses. Those with loans should test whether they could manage if interest rates remain high, and should speak to lenders early if repayments become difficult.

The message from the SARB’s business engagement is clear: businesses provide an early warning of economic pressure. For households, that warning is an opportunity to prepare before higher costs become even more difficult to absorb.