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Johannesburg - South Africa's producer price index
(PPI) is expected to have registered deflation of ?3.5% year-on-year (y/y) in
August from the -3.8% y/y seen in July, a survey by I-Net Bridge has found.
Forecasts among the nine leading economists surveyed ranged from -3.3% y/y
to -4.2% y/y.
The strong rand and high commodity prices are the key factors underlying
this market.
One of the economists to the survey notes that PPI inflation is actually
due to increase 1% month-on-month.
"Higher base metal prices, following ArcelorMittal's announcement of price
increases for selected steel grades and electricity price spill over effects
from June and July, will contribute to these upside pressures," says the
economist.
The annual average for PPI in 2008 was 14.2% from a revised 10.9% (10.0%)
in 2007 and from the 7.7% recorded in 2006 and from 3.1% in 2005, and compared
with an average of only 0.6% in 2004 and 1.7% in 2003.
The 2004 average was the lowest since 1959, when there was no change in
producer prices. The lowest annual consumer inflation in the post-1945 period
was also in 1959 at 1.1%.
The producer price index is now based on an updated set of weights, as well
as the prices of South African output, whether the output is sold in the
domestic market or exported. The reweighing has resulted in the metals,
minerals and oil components receiving heavier weightings, which was a big
factor behind some of the higher outcomes from May last year.
The data is due to be released by Statistics South Africa at 11:30 on
Wednesday.
- I-Net Bridge