South Africa just got a clear look at what the Iran war is doing to its economy.
Yearly inflation jumped to 4% in April from 3.1% the month before. That's the highest reading since August 2024.
The driver: fuel.
The Biggest Monthly Fuel Move In 18 Years
The fuel price index rose 18.2% in a single month. That's the steepest one-month jump since the CPI series began in 2008.
At the pump, petrol went up 3.06 rand a litre in April. Diesel rose 7.33 rand.
The next round of hikes hit in May. Petrol went up another 3.27 rand and diesel another 6.19 rand.
The trigger sits about 5,000 miles away. Brent crude is up about 50% since the U.S. and Israel struck Iran in late February.
The Strait of Hormuz is back in the line of fire. That narrow strip handles about a fifth of the world's seaborne oil.
Transport costs followed fuel straight up. They jumped 5.5% in a single month after being in mild deflation as recently as March.
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What The Reserve Bank Does Next
The South African Reserve Bank meets May 28. Its policy rate sits at 6.75%, with the prime rate at 10.25%.
Investec chief economist Annabel Bishop expects a pre-emptive 25-basis-point hike this month. She wants the bank to act before the shock spreads.
Standard Bank's Elna Moolman said the bank is "naturally concerned" the fuel spike will broaden. That means higher wages and prices chasing the shock.
Food prices are still calm at 2.8% year over year. But fuel and fertilizer prices tend to push food costs higher with a lag.
A potential "Super El Niño" later this year could squeeze farms even more. The Reserve Bank has flagged that on its radar.
The rand has also slipped against a strong dollar. That makes everything the country imports more expensive, from fuel to phones to food.
For a bank that targets 3% inflation, every reading above 4% raises the bar to act.
What To Watch
The fuel pressure is not done. May's pump prices came in higher than April's.
So the next inflation print will likely be hotter again.
The trade-off: a hike helps prop up the rand. But it tightens the screws on a strained economy.
Investors should also watch how second-round effects show up. Those are wage demands and price hikes in non-fuel goods.
If they spread fast, the Reserve Bank has less room to wait.
For now, food and core prices look calm. But fuel could pull them up over the next few months.
For investors, the Iran shock is now showing up in real consumer prices, and South Africa's print is the clearest sign yet.
Other emerging markets that import oil could see the same in their May reads.
The cost of a tank of gas in Johannesburg is now a Middle East story.
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