Fin24

SA factory gate prices see slower rise

2012-03-29 10:10

Johannesburg - South Africa’s producer inflation, which represents domestic output, slowed to 8.3% year-on-year (y/y) in February from 8.9% in January, Statistics South Africa said on Thursday.

Month-on-month inflation was at 0.9% in February from 0.3% previously.

Economists polled by Reuters expecting PPI to slow to 8.0% y/y while quickening to 0.7% on a monthly basis.

Razia Khan, head of Africa research at Standard Chartered, said the data was a mixed bag and that the oil price is still a concern for the Reserve Bank.

Consumer inflation slowed unexpectedly to 6.1% y/y in February - easing back towards the Reserve bank’s 3-6 % after breaching it in November.

Stats SA 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.

The central bank has left its repo rate unchanged at 5.5% for the past 16 months after reducing it by 650 basis points in the two years to end-2010.

All 24 economists polled by Reuters last week expected the Reserve Bank to keep the repo at 30-year lows when it concludes its second policy meeting of the year on Thursday.