Consumer inflation has hit its highest level in five years, at 6.5% – but it can still get worse, economists have warned.
Stats SA on Wednesday released the inflation data for May, which spiked up from 5.9% in April. The consensus among economists had been an uptick to 6.1%, a breach of the upper limit of the South Africa Reserve Bank’s (SARB) inflation target range of 4% to 6%.
But inflation hasn’t peaked yet. Economists expect it to lift further to above 7% in either June or July as petrol price hikes are taken into account. Despite government’s decision to extend the fuel levy reprieve from May until the beginning of August, in June petrol prices were hiked by about R2 per litre, and economists still expect a substantial hike in the petrol price in July.