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Johannesburg - Statistics South Africa said on Thursday producer inflation, which represents domestic output, accelerated to 7.4% year-on-year (y/y) in June from 6.9% in May.
The market was expecting the y/y rise in the producer price index to remain unchanged at 6.9% and accelerate to 3.9% on a monthly basis.
Analysts said the figure was higher than expected.
Freddie Mitchell, economist at the Efficient Group said: "We'll have to keep a close eye on this because it tends to give an indication of what we can expect to see in the consumer price index (CPI). Let's hope it doesn't get out of hand and we don't see a rate increase in this economic climate that we're in."
Colen Garrow, economist at Brait, said while the figure was higher than forecast it should not change the "overall picture on interest rates".
"They will move higher, but later than thought - perhaps in the first or second quarters of 2012 - it all depends on the inflation numbers. Also, winter tariffs have kicked in and it's not a good figure from an interest rate point of view," he said.
Consumer inflation quickened to 5.0% y/y in June from 4.6% in May, in line with the Reserve Bank’s forecast it will briefly pierce the 3% to 6% target towards year-end.
The Reserve Bank has left its repo rate unchanged at 5.5% so far this year, after reducing it by 650 basis points between December 2008 and end-2010.
The market was expecting the y/y rise in the producer price index to remain unchanged at 6.9% and accelerate to 3.9% on a monthly basis.
Analysts said the figure was higher than expected.
Freddie Mitchell, economist at the Efficient Group said: "We'll have to keep a close eye on this because it tends to give an indication of what we can expect to see in the consumer price index (CPI). Let's hope it doesn't get out of hand and we don't see a rate increase in this economic climate that we're in."
Colen Garrow, economist at Brait, said while the figure was higher than forecast it should not change the "overall picture on interest rates".
"They will move higher, but later than thought - perhaps in the first or second quarters of 2012 - it all depends on the inflation numbers. Also, winter tariffs have kicked in and it's not a good figure from an interest rate point of view," he said.
Consumer inflation quickened to 5.0% y/y in June from 4.6% in May, in line with the Reserve Bank’s forecast it will briefly pierce the 3% to 6% target towards year-end.
The Reserve Bank has left its repo rate unchanged at 5.5% so far this year, after reducing it by 650 basis points between December 2008 and end-2010.
