The consumer price inflation increased to 6.5% in May 2022, from 5.9% in April 2022, according to data released by Statistics South Africa on Wednesday. This means that inflation has risen to its highest level in five years.
The main contributors to the 6.5% annual inflation rate were food and non-alcoholic beverages, housing and utilities, transport, and miscellaneous goods and services.
The latest inflation figure has broken through the Reserve Bank’s 3 to 6 target band, raising the likelihood of a high interest rate hike in July.
The impact of fuel prices
Transport and food and non-alcoholic beverages accounted for just over half of the annual rate, with sharp price increases recorded in both categories.
Fuel, in particular, continues to be a major contributor, if the impact of fuel is removed from the CPI reading in May, the headline rate falls to 5.1% from 6.5%.
Diesel prices jumped by 8.1% between April and May, taking the annual rate to over 45%.
The average price of a litre of diesel in May 2021 was R16.20, meaning it cost R729 to fill a 45-litre tank.
Twelve months later, with the average price at R23.67 per litre, filling the same tank cost R1 065.
Consumer Price Index Document:
Source: SABC News (sabcnews.com)