Middle East conflict pushes up fuel prices; South Africa's inflation and interest rate hike pressures surge

Due to the continued rise in international oil prices and exchange-rate fluctuations, South Africa’s energy market, which is highly dependent on imports, is facing a clear impact. A well-known South African economist, speaking in an interview with CCTV, said that the impact of higher fuel prices is spreading across multiple sectors of the economy, pushing up the inflation level, and that the South African Reserve Bank may be forced to raise interest rates in the future.

On April 1, South Africa saw another round of fuel price increases, with both the 95-octane gasoline and diesel prices setting new historical records. South African economists said that inflation data may break through the upper limit of the South African Reserve Bank’s target within the coming months, and expectations for interest-rate hikes will shift from cuts to hikes.

**CEO and Chief Economist of a South African economic analysis firm, Azar Jami-en：**There is no doubt that this will have a fairly serious impact on the global economy. Because people will have to spend more on fuel, which means that spending on other things will correspondingly decrease. South Africa is no exception. The main victims of higher energy prices will be consumers, and even more seriously, this impact will spill over into many other areas of goods. Food is one of them, and agriculture will also be hit—not only because of increased costs brought about by higher imported fertilizer prices, but also because of rising diesel costs. Based on the oil prices and average exchange-rate levels over the past month, the inflation rate could rise from the current level of about 3% to between 4.5% and 5% over the next few months, which in turn is very likely to force the central bank to raise interest rates.

(Source: CCTV News)