MICHAEL METELITS, Johannesburg | Wednesday 7.00pm.
PRODUCER prices jumped sharply in May, rising by 6,0% on an annual basis in figures released by Statistics South Africa on Wednesday.
The increase represented an increase of 1,1% over April’s figures. The figures showed imported crude oil as a major factor in driving producer prices upwards. Average prices for oil rose by 24,8% in May, as opposed to an unusual 2,1% decline in April.
Higher oil prices and higher prices for manufacturers is likely to fuel domestic inflation, according to economists. Inflationary pressures might dull any appetite the fiscal authorities have for cheaper money.
The domestic price index for local inputs to manufacturers also rose by 1,1% on a month-to month basis in May, annualising to 5,1%. In April domestic prices for producers rose 0,6% annualised to 4,5%. Seasonally adjusted figures showed the domestic index up 0,9% in May.
Higher oil prices affected both imports as a whole directly, and indirectly as a cost in mining and quarrying domestic raw materials. HIgher prices and possible problems with oil production in Nigeria may point to more inflationary pressures ahead for South Africa.