Figures released by Statistics South Africa show that the Consumer Price Inflation rate has accelerated to 5.2% in May from 4.4% in April.
The statistics agency notes that this is the highest reading since November 2018.
Stats SA further notes that the change in the rate comes off a low base recorded in May 2020, when fuel prices were low.
An Economist at Econometrix Laura Campbell says demand-side inflationary pressures remain weak thereby limiting businesses from passing on cost increases onto consumers.
Campbell says, “Much as this increase was statistical in nature and that it was linked to the fact that while fuel prices were reduced in May this year, they were reduced more steeply in May last year when Brent crude oil prices declined significantly at the time. So we saw a sharp rise in the fuel inflation rate and that pushed up the headline number. However, if we exclude the effects of volatile food, fuel and energy prices, the so called core inflation rate only increases marginally to 3.1% from 3%.”
Despite a small monthly drop in the fuel price in May, the annual increase quickened to 37.4% from 21.4% in April.
Petrol prices were 41.8% higher in May compared with the same month the previous year, while diesel was 27.0% more expensive.
Vehicle prices climbed by 6.5% in the year to May. Other running costs for vehicles rose by 8.9% on an annual basis and by 0.8% from April 2021 to May 2021. Most notably, tyre prices increased on average by 3.3% from April 2021.