South Africa Inflation Rate Climbs to 15-Month High of 5%

South African inflation accelerated to a 15-month high last month, bolstered by rising fuel and food costs, increasing pressure on the central bank to raise interest rates from a 30-year low.

The inflation rate climbed to 5 percent from 4.6 percent in May, the Pretoria-based statistics office said on its website today. The increase was in line with the median estimate of 21 economists surveyed by Bloomberg. Prices rose 0.4 percent in the month.

The central bank left its benchmark interest rate unchanged at 5.5 percent on May 12, while saying that price pressures are intensifying. The bank will probably keep the rate unchanged tomorrow, according to all 22 economists surveyed by Bloomberg.

“You’ve got to start monitoring the trend more closely as its moving up quite quickly now,” said Colen Garrow, an economist at Brait SA in Johannesburg. “I think the Reserve Bank will respond, even if the reasons are totally out of their control.”

Inflation, which has accelerated for the past four months, will probably average 5.1 percent this year and 6 percent in 2012, according to the central bank, which is tasked with keeping the measure to within a 3 percent to 6 percent target band.

The rand traded at 6.9067 per dollar as of 10:26 a.m. in Johannesburg, from 6.9188 before the inflation data was released.

An index of food and non-alcoholic beverages prices rose 7.1 percent from a year earlier, while a transport-price index gained 5.2 percent, the statistics agency said.

The price of oil, which has gained 20 percent in New York since the start of 2010 until the end of last month, has started to fall. The government cut gasoline prices by 0.2 percent in June and 3 percent in July.

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