South African inflation nudges higher ahead of expected April surge

By Sfundo Parakozov

JOHANNESBURG, April 22 (Reuters) - ‌South Africa's ​headline ​consumer inflation edged up as expected last month, but analysts said the increase would be far larger ‌in April when fuel price hikes triggered by ⁠the U.S.-Israeli war on Iran have filtered through into consumer prices.

• Headline ‌consumer inflation accelerated to 3.1% ‌from a year earlier in March from 3.0% in February, matching a Reuters poll, statistics agency data showed on ​Wednesday.

• Inflation is set to accelerate to about 4% in April, when domestic fuel prices surged despite the ⁠government temporarily reducing a fuel levy to try to mitigate the impact of the ​Middle East conflict.

• South Africa imports most of its petroleum products, leaving it highly exposed to ​swings in global energy prices.

• Nedbank ‌economist Johannes Khosa said electricity tariffs also went up by more than 8% in April, which ⁠will add further upward pressure on prices.

• Khosa said the risk of an interest rate hike at one of the South ⁠African Reserve Bank's (SARB) next two policy meetings in May and July had ​increased materially.

• The central bank left its policy rate unchanged at 6.75% at its last meeting in late March.

• It targets inflation of ‌3% with a 1-percentage-point tolerance band on either side.

• "What will be impacting the SARB's decision is ‌the next release, for April, as the fuel price spike ⁠will then reflect and ‌will be telling," independent ​economist Elize Kruger said.

(Additional reporting by Nilutpal Timsina and Anathi Madubela; Editing by Alexander Winning and Thomas ‌Derpinghaus)

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