South African consumer price inflation accelerated to a 30-month high of 5.2% year on year in May, moving above the midpoint of the central bank’s target range for the first time since Pandemic struck.
The jump in headline inflation, from 4.4% in April, was in line with forecasts of economists polled by Reuters and the highest reading since November 2018, according to Statistics South Africa.
Food and fuel prices were major contributors to the higher rate in May, data from the statistics agency showed on Wednesday.
The South African Reserve Bank (SARB) tries to keep inflation between 3% and 6%, and it regularly talks about where it is in relation to the midpoint of that band.
Despite building price pressures, economists are not predicting the SARB will raise rates when it next meets in July. When Reuters last polled analysts in May survey medians suggested the bank would keep its repo rate at 3.5% throughout 2021, sticking to an accommodative monetary policy stance.
On a month-on-month basis, the consumer price index rose 0.1% in May, as expected, from 0.7% in the previous month.
Core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, increased to 3.1% year on year in May, from 3.0% in April. In month-on-month terms, core inflation was at 0.0% from 0.3% previously.