By Ntando Thukwana, Bloomberg
South African annual inflation accelerated to the highest level in 20 months in April, driven by sharp increases in local pump prices stemming from the Iran war.
Consumer prices rose 4% compared with 3.1% in March, Pretoria-based Statistics South Africa said in a statement on its website on Wednesday. That matched the median estimate of 17 economists in a Bloomberg survey.
The data is the first to capture the steepest surge in fuel costs since inflation targeting was introduced in 2000. The central bank targets inflation at 3%.
The price of Brent crude has climbed around 50% since the US and Israel attacked Iran in late February, effectively closing the Strait of Hormuz, a key waterway for about a fifth of the world’s seaborne oil and liquefied natural gas. The jump will also impact May inflation.
Economists polled by Bloomberg ahead of the release expect the central bank’s monetary policy committee to raise interest rates by 25 basis points to 7% when it announces its decision on May 28 to steer inflation back to target. That would mark the first rate increase in three years.
Governor Lesetja Kganyago said earlier this month that although the MPC cannot do much about higher inflation right now, it is committed to getting it back to 3%, “just where we had it before the shock hit.”
Countries around the world are grappling with inflation shocks triggered by the conflict, rolling out measures from fuel rationing to tax cuts and price controls.
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