Consumer inflation surged in May to 4.5 percent, driven largely by increases in fuel prices.

Statistics South Africa data shows the fuel index recorded a second large monthly increase, leaping by 14.3 percent to reach an annual rise of 28.7 percent.

This is a result of the oil price surge on the back of the Middle East conflict between Israel, the United States and Iran.

The conflict has seen the Strait of Hormuz closed, strangling global supply chains.

The price of both grades of petrol increased by R3.27 cents per litre in May, while the price of a litre of diesel went up by R5.27 cents per litre.

However, there is some positive news on the horizon, with signs of the end of the war in Iran.

Investec Chief Economist Annabel Bishop says, “The oil price has dropped to US$78.3 per barrel and the rand to R16.23/USD on the announced end to the Middle East war, which, if sustained, falls occur, will increase the cuts for both the petrol and diesel prices, aiding inflation lower for South Africa”.

She says, “The end of the war in the Middle East has not seen oil prices return to US65 per barrel yet, and oil price futures show the Brent crude oil price still above US$70/bbl in January next year. The SARB may pause in July if the peace deal holds.

Stats SA says inflation for food and non-alcoholic beverages has continued to subside, declining to 1.9% from 2,9 percent in April.

The statistics agency says the annual deflation for cereal products deepened, dropping to -1.4 percent from -1.2 percent in April.

“Maize meal is 4.4% and brown bread 0.3% cheaper than a year ago,” says Stats SA in a statement.

Meat inflation has also decelerated in May, recording an annual increase of 7.3 percent, down from April’s 9.4%.

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