INFLATION

Coming in at 6.5% year-on-year in May (vs 5.9% in April), Consumer Price Index inflation has breached the upper limit of the South African Reserve Bank’s 3%-6% target band, says Casey Delport, investment analyst at Anchor Capital. “This was above expectations, with the upside surprise stemming largely from food and fuel prices. Fuel, in particular, continues to be a major contributor – if fuel is removed from the May CPI reading, the headline rate falls from 6.5% to 5.1%. The price of diesel is more than 45% higher than it was a year ago, while petrol is almost 27% more expensive than it was in May 2021,” she says.