South Africa’s producer price index (PPI) rose by 5,1% year-on-year in December from a 4,5% increase in November, Statistics South Africa said on Thursday.
The PPI rose by 0,1% on a monthly basis after November’s monthly increase of 0,5%.
The PPI was expected to have risen by 5,2% year-on-year, according to an I-Net Bridge survey of economists, with the range from 3,5% to 5,5%.
Colen Garrow, economist at Brait, commented: “It’s clearly the fuel component that is pushing it up. The SARB [South African Reserve Bank] will probably do nothing with interest rates when it meets next week.”
Annabel Bishop, economist at Investec, said: “PPI inflation came out slightly below expectations. However, we expect that PPI inflation will rise significantly next month on the back of base effects, rising food prices and the high oil price. We still expect that interest rates will remain unchanged over 2006.”
According to Johann Rossouw, economist at Vector Securities: “The number is in line with our forecast. The low base calculation contributed to the higher outcome. I suspect that locally produced agricultural prices also went up.”
Nico Kelder, economist at the Efficient Group, said: “The fact that PPI was as expected indicates that there is not any inflationary pressure from the producer side of the economy.”
“The figure is slightly lower than our expectations,” commented Elna Moolman, economist at Standard Bank. “The key thing is food prices going forward — we’d be looking to see by how much they go up, if they do. We still don’t expect any change in the repo rate; we believe that today’s data just confirms our view that the MPC [monetary policy committee] should leave the rate constant.” — I-Net Bridge