PPI falls to 6.6% in April

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The Producer Price Index (PPI) eased to 6.6% in April, Statistics South Africa (Stats SA) said on Thursday.

In March PPI, which is the price of goods leaving factories and mines, eased to 7.2%.

Market consensus was that it would come in at 6.9%.

Over the month, the PPI increased by 0.3%.

Economists expect producer inflation to moderate further over the year as the base effect lessens and softer global demand contains the rise in prices of some commodities.

"However, upside risks remain due to the possibility of a significantly weaker rand and increased global risk aversion. Inflation is expected to be contained during the year, with consumer inflation forecast to return to within the target range later in the year. 

"With inflation moderating, the monetary authorities will be more comfortable in maintaining their current stance in order to support the fragile economy in an increasingly uncertain global environment," said Nedbank in a research note.

The bank expects the Reserve Bank to keep interest rates unchanged up until around March 2013.


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