South Africa: Inflation hits over two-year high in May
Consumer prices rose 0.08% over the previous month in May, coming in below April’s 0.67% increase. May’s result marked the softest rise in prices since November 2020. The result was chiefly driven by moderating price pressures for food and non-alcoholic beverages and falling prices for transportation.
Inflation came in at 5.2% in May, up from April’s 4.4%. May’s figure represented the highest inflation rate since November 2018. Annual average inflation edged up to 3.3% in May (April: 3.1%). Core inflation ticked up to 3.1% in May, from April’s 3.0%.
Commenting on the outlook for inflation, Pieter du Preez, senior economist at Oxford Economics, reflected:
“We expect inflationary pressures to moderate towards the end of the year. The stronger rand, compared to last year, and lower food prices will aid in driving inflation lower over the short term. However, some upward pressure will stem from a 15.6% rise in electricity prices.”