South Africa’s consumer price growth rose to its highest in more than a year and close to the mid-point of the central bank’s target range, driven mainly by a sharp jump in transport costs following record increases in fuel on higher global oil prices.

Strict lockdowns during the worst period of the Covid-19 pandemic in 2020 limited economic activity and pushed consumer inflation to a 15-year low. Prices have gradually begun to rise with the easing of those restrictions and an increase in economic activity.

Headline consumer price inflation increased to 4.4% year-on-year in April, its highest since February last year, from 3.2% in March, data from Statistics South Africa showed on Wednesday.

The transport category showed the steepest increase, up 10.6%. Food prices also rose, by 6.3% year-on-year, while alcohol and tobacco prices increased 4.8%

On a month-on-month basis, the CPI was unchanged at 0.7%.

The bank has repeatedly stressed that keeping inflation low is the best way to support an economic recovery. The latest price growth figure is a touch below the 4.5% mid-point of its target range.

The figure also means South Africa is now running a negative real rate, a situation the central bank has typically not tolerated for extended periods. It also risks turning off investors seeking high returns.

The rand weakened in response to the inflation increase, sliding to a session-worst 14.0425 per dollar shortly after the release, from 14.03 just before.