Hope for interest rate relief as inflation cools

South Africa’s annual inflation rate cooled in May, continuing April’s downward trend.

StatsSA announced today that annual consumer price inflation (CPI) was 6.3% in May 2023, down from the 6.8% recorded in April 2023. This is the lowest inflation the country has seen since April 2022.

However, the inflation rate remains outside the South African Reserve Bank’s target range of 3% to 6%.

According to StatsSA, the consumer price index increased by 0.2% in May 2023.

The main contributors to the 6.3% annual inflation rate were:

• Food and non-alcoholic beverages increased by 11.8% year-on-year and contributed 2.1 percentage
• points;
• Housing and utilities increased by 4.0% year-on-year and contributed 1.0 percentage point;
• Transport increased by 7.0% year-on-year and contributed 1.0 percentage point; and
• Miscellaneous goods and services increased by 6.3% year-on-year and contributed 0.9 of a percentage
• point.

In May, the annual inflation rate of goods was 8.0%, down from 9.0% in April. For services, it was 4.7%, unchanged from 4.7% in April.