The South African economy is concentrated, with low investment levels and weak productivity growth.

^{by Pamela Vorster}

During pricing shocks, firms with market power raise prices quickly but reduce them slowly when their input costs fall, fuelling sticky inflation and elevated inflation expectations.

Limited competition weakens the effectiveness of monetary policy pass-through, as dominant firms with strong reserves and pricing power are less sensitive to interest rate changes than firms in competitive markets.

Weak competition across food and agro-processing value chains contributes to persistently high prices.