Producer price inflation slows down

Producer price inflation—or the increase in factory gate prices—eased to 9.8% year-on-year in December, Statistics South Africa said on Thursday.

“This rate is 0.3 of a percentage point lower than the corresponding annual rate of +10.1% in November 2011,” the agency reported.

The lower annual rate was driven by decreases in mining and quarrying, other manufacturers, wearing apparel, and electrical machinery and apparatus.

The decreasing rate of inflation was partially counteracted by increases in electricity, basic metals and food at manufacturing.

PPI for December was lower than expected, with economists expecting it to hold steady at 10.1%, according to Reuters.

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