South Africa’s annual consumer inflation accelerated in May but came in below market expectations, offering some relief to policymakers as global energy pressures continue to weigh on prices.
Data from the statistics agency showed headline inflation rose to 4.5 percent year on year in May, up from 4.0 percent in April.
On a monthly basis, prices increased by 0.7 percent in May, slowing from the 1.1 percent rise recorded in April.
Economists surveyed by Reuters had forecast annual inflation would climb to 4.7 percent, partly due to the impact of the U.S.-Israel conflict involving Iran on global fuel and food prices.
South Africa, which imports much of its fuel, remains vulnerable to increases in international energy costs, which can quickly feed into transport, food and household expenses.
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The latest inflation figure remains above the midpoint of the South African Reserve Bank’s target range, which aims to keep inflation at 3 percent, with a tolerance band of one percentage point on either side.
The central bank raised its benchmark interest rate at its May monetary policy meeting, marking its first rate increase in three years, as it continued efforts to keep inflation expectations under control.
The bank is scheduled to hold its next monetary policy meeting on July 23, when policymakers will assess whether inflation pressures require further action.
