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Producer price inflation eases

May 30 2013 14:37

Cape Town - Producer price inflation eased to 5.4% in April, Statistics SA said on Thursday.

The annual percentage change in the PPI for final manufactured goods (headline PPI) was 5.4% in April 2013, compared with 5.7% in March 2013, Stats SA's latest figures showed.

From March 2013 to April 2013 the PPI for final manufactured goods increased by 0.4%.

The main contributors to the annual rate of 5.4% were food products, beverages, and tobacco products (6.1 percent year-on-year and contributing 2.0 percentage points), and coke, petroleum, chemical, rubber, and plastic products (5.8% year-on-year and contributing 1.0 percentage points).

The main contributors to the monthly increase of 0.4% were food products, beverages, and tobacco products (0.7% month-on-month and contributing 0.2 of a percentage point), and metals, machinery, equipment, and computing equipment (1.0 percent month-on-month and contributing 0.2 of a percentage point), Stats SA said.

Investec economist Annabel Bishop said PPI inflation came out lower than expected because of intermediate manufactured goods and mining.

"We continue to expect no interest rate cuts this year unless the rand strengthens markedly," she said.

"Recent substantial rand weakness will push up future inflation in SA, extending the time period taken for consumer price index inflation to return to the inflation target range."

The PPI measures the cost of a basket of goods needed by a typical commodity producer and measures inflation at factories, mines, and farms.

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