South Africa’s inflation rate has climbed back to the upper end of the South African Reserve Bank (SARB)’s target range.
Statistics South Africa (Stats SA) said consumer inflation accelerated to 5% year-on-year in June, up from 4.5% in May.
Stats SA: Annual headline inflation rises to 4.5% in May from 4.0% in April
Rising fuel prices are forcing South Africans to change daily habits
June’s reading marks the highest annual inflation rate since the start of the year, moving from 3.5% in January to 5% in June.
This has reinforced expectations that price pressures are beginning to develop.
The transport sector continued to dominate South Africa’s inflation basket in June, cementing its position as the largest contributor to headline consumer inflation as annual price growth accelerated to 5%.
According to Stats SA, the transport category contributed 1.7 percentage points to the annual inflation rate, making it the single biggest driver of price growth.
Stats SA’s director for price statistics, Patrick Kelly, said transport inflation accelerated largely on the back of a surge in fuel prices and an increase in the cost of operating personal transport equipment.
“Fuel prices climbed by 34.3% in the past 12 months. Higher fuel prices have had a knock-on effect on passenger transport inflation, which registered a monthly rise of 8.1 percent in June.”
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