(Archive photo: Canva)
Inflation rose to 4.5% in May, compared to 4.0% in April. This is the highest annual inflation rate since July 2024, when inflation stood at 4.6%.
“The figure is lower than our expectation and the market consensus of 4.8%. The consumer price index (CPI) rose by 0.7% monthly,” says Koketso Mano, senior economist at FNB.
According to Statistics South Africa (StatsSA), the increase was largely caused by higher fuel prices. The fuel index rose for the second consecutive month, increasing by 14.3%. Fuel prices are now 28.7% higher than a year ago.
Petrol prices have risen by 24.8% over the past year, while diesel prices have increased by 53.8%.
The influence of fuel on the overall inflation rate is indicated by the index that excludes fuel. This measure remained unchanged at 3.7% in May, the same level as in April. Over the past year, this rate has varied between 3.5% and 3.8%.
Fuel inflation should decrease in July, says Mano. “However, continued tensions in the Middle East, as well as any prolonged disruption of the physical supply of energy, remain important short-term risks that could push up inflation,” says Mano.
Archive photo for illustration. (Photo: Soeren Stachee/AFP)
Food baskets are cheaper this month
Meanwhile, food and non-alcoholic beverage inflation declined. The annual rate fell from 2.9% in April to 1.9% in May. This is significantly lower than the peak of 5.7% recorded in July last year.
Cereal products are on average 1.4% lower than a year ago. Maize flour is currently 4.4% cheaper than last year, while brown bread is 0.3% cheaper.
Meat inflation also fell. The annual increase fell from 9.4% in April to 7.3% in May. Meat prices fell by 0.8% on a monthly basis. The price of stew meat decreased by 3.0% between April and May, while minced meat became 2.4% cheaper.
Consumers also experienced relief with fresh produce. Fruit and nuts were on average 8.5% cheaper than a year ago, while vegetable prices were 6.0% lower.
However, prices for certain dairy products have started to rise. Inflation for milk, other dairy products and eggs increased from 0.1% in April to 0.9% in May.
Salad dressing was 10% more expensive than a year ago, mayonnaise 8.1% more expensive and salt 9.3% more expensive.
Non-alcoholic beverages also experienced higher inflation. The annual rate rose from 4.6% to 4.9%. Ordinary tea’s inflation rate shot up to 8.3%, while rooibos tea’s rate rose from 5.2% to 7.5%.