South Africa's annual inflation rate rose for the third month to 4.5% in May 2026, marking the steepest since July 2024, though below the expected 4.7%. Inflation was mainly driven by transportation (9.4% vs 4.9% in April) and housing & utilities (5.3% vs 5.2%), reflecting pass-through from higher fuel costs due to the Middle East conflict and Eskom’s recent electricity tariff hike. Additional upward pressure came from insurance and financial services (5.7% vs 5.7%) and restaurants & hotels (5.8% vs 5.2%). Meanwhile, food inflation continued to ease (1.9% vs 2.9%). The core inflation rate, which excludes prices of food, non-alcoholic beverages, fuel, and energy, rose to an over 1-1/2-year high of 3.8% in May, up from 3.6% in the previous month. Monthly, the CPI rose by 0.7% in May, down from a 1.1% increase in the prior month.