Inflation in South Africa accelerated more sharply than expected in June, reinforcing expectations that the central bank will announce a second consecutive interest rate increase on Thursday.
Annual inflation as measured by the Consumer Price Index (CPI) reached 5.0% in June — the highest level in two years — up from 4.5% recorded in May, according to data released by Statistics South Africa.
Economists surveyed by Reuters had forecast a rate of 4.7%. The transport category was identified as the primary driver of the increase, both on an annual and monthly basis, after the war in Iran triggered a sharp rise in fuel prices.
Core inflation, which excludes more volatile components such as food and energy, came in at 4.1% in June, also above economists’ forecast of 3.9%.
The majority of analysts consulted by Reuters had already anticipated an interest rate increase even before the inflation data were published. “The table is set for a 25 basis point rate hike,” said independent economist Elize Kruger.
Since the last monetary policy meeting held in May, a survey revealed a sharp rise in inflation expectations — an indicator closely monitored by the central bank. In May, the institution revised its inflation forecasts upward for 2026–27, to 4.4% and 3.7% respectively, compared with previous estimates of 3.7% and 3.3%.
“The upside surprise in June inflation, combined with a deterioration in household inflation expectations, definitely strengthens the case for a monetary policy tightening in July,” said Razia Khan, economist at Standard Chartered.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/07/23/mundo/africa/africa-do-sul-inflacao-acelera-e-reforca-expectativas-de-nova-subida-das-taxas-de-juro/
