Inflation in South Africa accelerated in June and reached its highest level in thirteen years, driven mainly by food, transport and housing prices, according to official figures released on Wednesday.
Annual consumer price inflation rose to 7.4% in June from 6.5% in May, marking its highest pace since May 2009, the government statistics agency (StatsSA) said in a communicated
Inflation has reached its highest level in decades in many countries, fueled among other things by the war in Ukraine and the easing of restrictions linked to the global Covid pandemic.
This situation has prompted several central banks to raise their interest rates, but these measures – which increase the cost of borrowing for businesses and individuals – are now fueling the risks of recession.
In South Africa, the first industrial power on the African continent, the central bank wants to keep inflation within a range of 3% to 6%. The monetary institution has raised its benchmark interest rate several times in recent months, due to a persistent rise in prices.
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This is a reversal from 2020, when the central bank cut interest rates significantly to help the economy weather the coronavirus pandemic.