South Africa's consumer inflation rate accelerated to 4.5% in May, largely driven by a sharp increase in fuel prices linked to escalating tensions in the Middle East.
According to Statistics South Africa (Stats SA), the fuel index recorded its second consecutive substantial monthly increase, rising by 14.3% in May and pushing annual fuel inflation to 28.7%.
The spike follows a surge in global oil prices amid conflict involving Israel, the United States and Iran. The closure of the Strait of Hormuz, a critical global shipping route, has disrupted oil supplies and intensified concerns over energy security worldwide.
As a result, motorists felt the pinch at the pumps, with both grades of petrol increasing by R3.27 per litre during the month. Diesel prices climbed even more sharply, rising by R5.27 per litre.
Despite the recent inflationary pressures, economists say there may be relief ahead if geopolitical tensions continue to ease.
Investec Chief Economist Annabel Bishop said oil prices and the rand had both strengthened following announcements signalling an end to the conflict.
"The oil price has dropped to US$78.3 per barrel and the rand to R16.23 against the US dollar following the announced end to the Middle East war. If these trends are sustained, further declines in petrol and diesel prices could follow, helping to lower inflation in South Africa," Bishop said.
She cautioned, however, that oil prices remain elevated compared to pre-conflict levels.
"The end of the war has not yet seen oil prices return to around US$65 per barrel, and futures markets still show Brent crude trading above US$70 per barrel in January next year. The South African Reserve Bank may pause interest rate cuts in July if the peace agreement holds," she added.
Meanwhile, food inflation continued to ease, offering some respite to consumers.
Stats SA reported that inflation for food and non-alcoholic beverages slowed to 1.9% in May, down from 2.9% in April.
The agency said annual deflation in cereal products deepened to -1.4%, compared to -1.2% the previous month.
"Maize meal is 4.4% and brown bread 0.3% cheaper than a year ago," Stats SA said in a statement.
Meat prices also showed signs of moderating, with annual inflation slowing to 7.3% in May from 9.4% in April.
Economists will now be watching closely to see whether easing fuel prices and lower food inflation will help stabilise consumer prices in the months ahead.