South Africa’s consumer inflation rate climbed to 4.5% in May, up from 4% in April, marking the highest annual rate recorded since July 2024, when inflation stood at 4.6%.

The monthly change in the consumer price index (CPI) was 0.7% in May, according to data released by Statistics South Africa (Stats SA) on Wednesday.

The statistical agency attributed the increase primarily to a sharp rise in fuel prices, which recorded a second consecutive monthly surge of 14.3%, pushing annual fuel inflation to 28.7%.

Over the past 12 months, petrol prices increased by 24.8% and diesel by a substantial 53.8%, reflecting supply uncertainty linked to ongoing geopolitical tensions in global energy markets.

The impact of fuel on overall inflation becomes clear when examining the CPI excluding fuel index, which registered an annual change of 3.7% in May – unchanged from April. This rate has moved within a narrow range of between 3.5% and 3.8% over the past 12 months, with a monthly increase of just 0.2% in May.

The latest reading keeps inflation within the South African Reserve Bank’s 3% to 6% target band, but positions it closer to the upper half of that range.

Food inflation continues to ease

Inflation for food and non-alcoholic beverages continues to decline, dropping to 1.9% in May from 2.9% in April. This represents a significant decline from the peak of 5.7% recorded in July 2025.

Annual deflation for cereal products deepened to -1.4% from -1.2% in April, with maize meal now 4.4% cheaper and brown bread 0.3% cheaper than a year ago.

Meat inflation also cooled in May, recording an annual increase of 7.3% compared with April’s 9.4%, while the monthly rate fell by 0.8%. Stewing beef prices dropped by 3% and beef mince by 2.4% between April and May.

Prices for fruits and nuts and vegetables remained lower than a year ago at -8.5% and -6% respectively. Both categories have been in deflationary territory since October 2025.

However, some food categories showed upward movement. Annual inflation for milk, other dairy products and eggs increased to 0.9% from 0.1% in April, with full cream long-life milk rising 1.7% month-on-month and low fat fresh milk climbing 1.5%.

The ‘other food’ category saw annual inflation rise to 4.9% from 4.1% in April, with salad dressing up 10% year-on-year and mayonnaise rising 8.1% annually.

Central bank stance remains cautious

The South African Reserve Bank has recently signalled that it is prioritising inflation anchoring amid persistent external risks, particularly energy price volatility linked to ongoing global geopolitical tensions.

Officials have pointed to the need to ensure that inflation expectations remain stable before considering any easing in monetary policy, reinforcing expectations that policymakers will remain cautious on the timing of any potential rate cuts.

Economists say the inflation profile suggests South Africa’s disinflation process is uneven, with services inflation relatively stable but goods prices more sensitive to imported cost pressures and currency movements.

Transport inflation has remained elevated beyond fuel, reflecting higher costs that feed through into logistics and consumer prices across the economy.

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Outlook remains uncertain

Despite the uptick, inflation remains significantly lower than the double-digit levels seen in previous years, reflecting the impact of tighter monetary policy and relatively stable domestic demand conditions.

However, analysts warn that inflation could remain sticky in the near term if global oil prices stay elevated or if currency volatility increases imported costs for key goods.

For households, the latest figures confirm a gradual but persistent increase in the cost of living, particularly in essential categories such as fuel, transport and utilities.

The Reserve Bank is expected to maintain a data-dependent stance in the coming months, balancing the need to support growth with its primary mandate of keeping inflation within target over the medium term.

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