South Africa‘s consumer inflation rose to its highest since December, but remained well below the upper end of the central bank’s target range, as transport costs rose on the back of climbing fuel prices.
Headline consumer inflation accelerated to 4.5% year on year in March from 4.1% in February, rising 0.8% on monthly basis, Statistics South Africa said on Wednesday.
Price-growth in Africa‘s most industrialised economy had fallen steadily over the past year, reaching an 11-month low of 4.0% in January due to weak consumer demand, tame food prices and a drop in petrol charges to multi-year lows.
But an uptick in the price of global crude has seen fuel prices jump in the past two months and analysts see inflation continuing to rise throughout 2019 after ailing power supplier Eskom was granted a 13% tariff hike.
A leap in transport prices, to a 6.4% rate of increase from a 3.6% rise in the previously contributed the most to the uptick in overall consumer prices.
The rand was unmoved by the inflation figures as they were largely in-line with forecasts. The currency traded at 13.95 per dollar at 0830 GMT.
“We see inflation accelerating further in the next few months and breaching the upper bound of the Sarb’s 3% – 6% target band in Q1 2020,” said analyst at Continuum Economics Juri Kren in a note.
In May the South African Reserve Bank (Sarb) kept benchmark lending rates unchanged at 6.75%, saying risks to the inflation outlook were evenly balanced.