Share

Producer inflation drops to 4.2%

Johannesburg - South African producer inflation, which represents domestic output, fell to 4.2% year-on-year in September compared with 5.1% in August, Statistics South Africa said on Thursday.   

On a month-on-month basis, prices at the factory gate dropped by 4% in September after a 0.7% increase in August.

Elna Moolman, economist at Renaissance Capital said that although the headline number was a little bit lower than expected, food prices continued to show some upward pressure, and generally, consumer goods within the PPI basket showed some pressure.

“The headline number doesn’t necessarily extrapolate the good news from the consumer inflation perspective.

“Our baseline view remains the Reserve Bank is going to keep rates on hold at current levels for at least 2012 and 2013.”

Investec Group economist Annabel Bishop agreed.

“We still do not expect the SARB to cut interest rates again this year, as CPI inflation is the relevant measure and it is likely to rise above 6.0% during the MPC’s inflation target period.”

Colen Garrow of Meganomics said the figure indicates manufacturers are still holding on to some of the price increases themselves and not passing them on to the price chain for fear of losing market share.

“I do not think it is sustainable. But the number is good. I do not think it will change anything on monetary policy.”

The rand was little changed at R8.6926/$ at 12:00 from R8.69 just before release of the data at 11:30 while the yield on the 2015 bond was at 5.44% from 5.455%.

Statistics South Africa plans sweeping changes to PPI that will make it a more relevant indicator for consumer prices from 2013.

For now, the index is dominated by commodities and tends to move in tandem with those prices, with little pass-through to consumer inflation.

 
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.0%
Rand - Pound
23.90
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
-0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders