JOHANNESBURG: South Africa’s annual consumer inflation accelerated to 5.0% in June, up from 4.5% in May, exceeding market expectations, official data showed on Wednesday.
Statistics South Africa reported that monthly inflation remained unchanged at 0.7%, matching the rate recorded in May. Economists surveyed by Reuters had forecast annual inflation to rise to 4.7%.
Why did inflation increase?
The rise in inflation was driven by higher global energy prices, with analysts pointing to the impact of the conflict involving the United States, Israel and Iran on fuel costs.
South Africa imports most of its fuel, making the economy particularly vulnerable to increases in international oil prices. The latest inflation data comes ahead of the South African Reserve Bank’s interest rate decision scheduled for Thursday, as policymakers seek to keep inflation close to the bank’s 3% target.