South Africa's headline consumer inflation rose for the second month in a row in March, to 7.1% year on year from 7.0% in February, data from Statistics South Africa showed on Wednesday.
Analysts polled by Reuters had predicted a drop to 6.9%.
On a month-on-month basis, consumer inflation rose to 1.0% from 0.7%.
Inflation has remained stubbornly high in Africa's most industrialised economy since peaking in July 2022 at 7.8%, leading to a run of interest rate hikes from the central bank.
At its last meeting in March, the South African Reserve Bank (SARB) surprised analysts with a larger-than-anticipated 50 basis point hike.
The SARB targets inflation between 3% and 6%.
Core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, was at 5.2% year on year in March, the same as in February.
Month-on-month core inflation was at 0.8%, also unchanged.
Luigi Marinus, Portfolio Manager at PPS Investments told Business Report, “Although there was only a small increase to inflation in March, the concern is that the effect of the 4.25% of interest rate hikes since the start of this hiking cycle is more protracted and not yet having the desired weakening effect on inflation. After the surprise 50 basis point hike post the last MPC meeting, this increase in inflation may signal that we have not yet reached the end of the hiking cycle.”
Prices of food and non-alcoholic beverages increased by 14.0% year-on-year which was up from the 13.4% increase last month and meant that this was once again the largest contributor (2.4%) to year-on-year inflation. Transport (1.3%) and housing and utilities (1.0%) remained large contributors with fuel and public transport being sizable contributors. Electricity and other fuels increased by 8.2% year-on-year but the approved 18.65% hike in Eskom tariffs has come into effect in April (Municipal increase of 18.49% will be effective from 1 July) and will have a further impact on inflation going forward.
Reuters / Additional reporting by Ashley Lechman