South Africa inflation at 5% in June

South Africa’s headline inflation rose to 5.0% in June, the highest in nearly two years, driven mainly by transport costs which jumped about 12.7% year-on-year and contributed the largest share to the increase. Housing and utilities and insurance and financial services also contributed meaningfully, each rising around 5.5% and 5.9% respectively, while food inflation remained relatively subdued. The month-on-month CPI was 0.7%, and analysts broadly expected the pace to be temporary, with some foreseeing inflation easing later as fuel prices fluctuate. The data adds pressure on the South African Reserve Bank to consider further rate hikes, with several observers signaling a likely near-term move despite uncertainties in global energy markets. Fuel price pressures, including diesel and petrol, and broader energy costs were repeatedly cited as key drivers, amid ongoing tensions in the Middle East that could influence imports and transport costs. Analysts forecast varying trajectories for 2026, but overall the June print signals persistent inflation risks linked to transport and energy costs rather than broad demand-driven inflation.