South Africa’s factory-gate inflation ticked up to 9,5% year-on-year in October, data showed on Thursday, beating forecasts and reinforcing expectations for an interest-rate rise next week.
Producer price inflation (PPI) accelerated from 9,4% year-on-year in September, and outstripped forecasts of a 9,1% rise, Statistics South Africa said.
On a monthly basis, PPI jumped by 1,1% after a 0,7% decrease in September. Economists polled by Reuters had forecast the monthly rate of increase at 0,7%.
The data comes a day after figures showed that the targeted CPIX (consumer inflation less mortgage costs) inflation soared further away from the top-end of the central bank’s 3% to 6% band at 7,3% year-on-year in October, and adds further pressure on the Reserve Bank to raise interest rates again.
”I think with these figures, at this stage a hike [in interest rates] next week is a no-brainer,” said Adenaan Hardien, chief economist at Cadiz African Harvest.
”We may see an increase of about 50 [basis points] next week and another 50 next year. While there were other broad-based price inflation pressures, what shocked us was the extent of food-price pressures, which was pretty high,” he said.
Food prices and sharply rising fuel prices have been the main driver of higher inflation over the past year.
Reserve Bank Governor Tito Mboweni said earlier this month he would raise rates on December 6 if it were up to him alone. — Reuters