South Africa’s June 2005 producer price index (PPI) rose by 2,3% year-on-year (y/y) from a 2,4% y/y increase in May, Statistics South Africa (Stats SA) said on Thursday.
The month-on-month (m/m) increase was 1,5% in June compared with a 0,5% rise in May 2005.
South Africa’s June PPI was expected to ease to a 2,2% y/y increase from 2,4% y/y in May. According to an I-Net Bridge survey of economists, the range was from 1,5% y/y to 2,5% y/y.
Colen Garrow, an economist at Brait said: “It is higher than I expected. I think generally prices are trending higher because of the oil effect. I think it will
have no impact on rates — interest rates will remain on hold when the monetary policy committee next meets.
Mike Schussler, an economist at T-SEC said: “The monthly figure increase is much higher than I expected, but it is relatively low in the main. I think the increase is due to the higher oil price. Overall I think the figure is going to be neutral for the bond market, rand and equities.”
Rudolf Gouws, the chief economist at RMB said: “It is slightly worse than our expectation of 2,2% but together with the CPI data we saw yesterday [Wednesday], it
confirms that inflation remains very much under control. Our position hasn’t changed that inflation is at a pretty much low point but we’ll start seeing PPI and CPI lifting late this year or early next year.”
Jac Laubscher, the group economist at Sanlam said: “The data is much in line with expectations, with the domestic component falling but the imported component higher, which reflects oil price movements. It doesn’t change our forecasts for either consumer inflation or interest rates, and in terms of flow-through to consumer inflation, there doesn’t appear to be any change in pipeline pressure-
it’s still low.” – I-Net Bridge