Home Business Cost of living expected to increase, erode real incomes
Business

Cost of living expected to increase, erode real incomes

Share
Household living costs; All major components of household living costs are expected to increase in the next 12 months by the majority of the surveyed chief economists.
Share

MBABANE – Everyday consumers are facing a fresh wave of financial pressure as basic necessities become significantly more expensive over the next 12 months.

This is according to the latest Chief Economists’ Outlook released by the World Economic Forum (WEF) yesterday.

The report builds on extensive consultations and surveys with chief economists from the public and private sectors, organised by the World Economic Forum’s Centre for the New Economy and Society. The report supports the WEF’s Future of Growth Initiative, a space for exchange and collaboration to enable greater competitiveness and economic transformation. The survey featured in this edition was conducted from August 4 to 20, 2026.

The report warns that household budgets worldwide will feel the pinch as essential items drive a renewed cost-of-living squeeze. An overwhelming 88 per cent of chief economists surveyed expect food prices to rise, while 83 per cent predict higher electricity bills and 77 per cent foresee increases in transport costs.

As a result, real incomes, the actual buying power of a paycheck after taking inflation into account, are expected to either stagnate or shrink across most regions. Sub-Saharan Africa faces a particularly difficult outlook: 31 per cent of chief economists expect inflation-adjusted household earnings to drop over the coming year, while 42 per cent expect earnings to remain flat.

Only a few emerging Asian economies, such as India and South-East Asia, are projected to see meaningful real income growth.

What makes this upcoming squeeze particularly difficult for families is that governments have far less room to help.

Since 2020, State intervention, such as stimulus checks, energy subsidies and emergency relief programmes served as the single biggest buffer protecting households and businesses from global shocks. Sixty-nine per cent of economists point to government spending as the main pillar of economic resilience over the past four years.

However, only 28 per cent of economists expect governments to play that protective role over the next year.

High public debt burdens and depleted national coffers mean States no longer have the financial capacity to cushion families from price hikes.

“Government support played a critical role in navigating successive crises, but fiscal capacity is likely to be more constrained going forward,” noted Attilio Di Battista, Head of Economic Growth and Transformation at the WEF. “The priority now is to strengthen the foundations of resilience before the next shock arrives.”

With limited funds, governments are expected to rely on quick, broad-brush relief measures rather than direct cash payouts. Sixty per cent of economists expect States to reduce taxes on basic goods, 54 per cent expect consumption subsidies and 50 per cent anticipate price caps.

Only 26 per cent expect targeted cash transfers to low-income households.

Share
Written by
Nhlanganiso Mkhonta

Nhlanganiso Mkhonta serves as Business Editor at the Times of Eswatini. He reports on business, economics, finance, investment, entrepreneurship and public policy, producing insightful coverage and analysis of the issues driving Eswatini’s economy and the wider African business environment.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Don't Miss

Hyundai Creta arrives with bold new attitude

Hyundai Eswatini has wel­comed the all-new Hyundai Creta to the local market, bringing a sharper look, upgraded technology and a choice of confident...

Swallows appeal to fans for financial help

MBABANE – MTN Premier League giants Mbabane Swallows have appealed to fans for donations of at least E50 as financial pressures threaten the...

Ezulwini Palazzo partnership targets world-class status

MBABANE – A landmark hotel management partnership is set to position Ezulwini Palazzo as a world-class destination connecting Eswatini with SADC, Africa and...

FNB demands over E14 million from two ex-employees

MBABANE – First National Bank (FNB) has instituted High Court proceedings against two of its former employees, seeking more than E14 million in...

Bishop Hlatshwako faces E110 000 maintenance claim

MBABANE – Bishop Vincent Hlatshwako, who recently engaged to be married, is facing a court application seeking to recover E110 709.51 in alleged...

Related Articles

IMF lowers Eswatini 2026/27 growth forecasts

MBABANE – The International Monetary Fund has lowered Eswatini’s growth forecasts for...

Business confidence softens: Private sector credit falls 1.4%

MBABANE - Business confidence showed signs of softening at the end of...

AGSPAC reports E752 948 loss in first 18-month results

MBABANE - Newly listed AGSPAC Limited recorded a E752 948 loss for...

AfDB-backed MNWAP Phase II advances with Ethemba Dam assessment

MBABANE - The African Development Bank-backed Mkhondvo-Ngwavuma Water Augmentation Programme Phase II...