South Africa’s November 2005 producer price index (PPI) is expected to ease to a 4,1% year-on-year (y/y) increase from 4,2% y/y in October and 4,6% y/y in September.
According to an I-Net Bridge survey of economists, the range is from 3,7% y/y to 4,3% y/y. The expected easing is due to a reduction in the price of imported crude oil.
The landed rand price of crude oil was below the Opec basket spot rand price in the first half of the year, but in September it was 23,7% higher.
The locally-produced inflation eased to 3,5% y/y in October from 3,8% y/y, while imported inflation dropped to a 5,8% y/y increase from a 31-month peak of 6,8% y/y in September.
The main reason for October’s imported inflation reduction was due to an easing in the y/y rate of imported crude oil to 53,4% in October from a massive 71,8% y/y in September.
Statistics South Africa (Stats SA) will release the October producer price data at 11.30am on Thursday, December 15.
The average for 2004 was a producer inflation rate of 0,6% compared with the 2003 average of 1,7% and 14,2% in 2002.
The 2004 average was the lowest since 1959, when there was no change in producer prices. The lowest annual consumer inflation in the post-1945 period
was also in 1959 at 1,1%.
The May 2004 PPI data ended the y/y deflation trend that began in September
2003, when the index posted the first y/y deflation since World War II.
Overall imported prices ended 19 consecutive months of y/y deflation in November 2004 and then moved back into y/y deflation in December.
In 2003 imported prices declined by 4,2% after surging by 15,5% in 2002 and in 2004 there was another year of imported deflation with a 3,9% decline.
Locally produced inflation eased to 2,3% y/y in 2004 from 3,9% in 2003 and 13,2% in 2002. – I-Net Bridge