South Africa's annual headline producer price inflation speeded up to 5.7% in March from 5.4% in February, Statistics South Africa said. The main contributors to the March producer inflation were food products, beverages and tobacco products, whose prices rose 5.9% y/y, contributing 2.0pps to the producer price index (PPI). The prices of coke, petroleum, chemical, rubber and plastic products grew by 9.2% y/y, contributing 1.6pps to the PPI, the statistics office elaborated.
On a monthly basis, the headline producer price inflation was 0.9%.
Economists, quoted by BusinessDay, said that March producer price inflation was higher than expected, but should moderate in the coming months, affected by subdued global economic growth and easing commodity prices. Higher electricity prices and weaker rand could, however, put some pressure on producer prices. According to Nedbank economist Johannes Khosa, the higher than expected PPI would not pressure the central bank to hike interest rates, given that consumer price inflation is still within its target range.
As of January 2013, the statistics office releases five separate industry-specific producer price indices (PPI), with final manufactured goods representing the headline number. The other four PPIs cover agriculture forestry and fishing; mining and quarrying; electricity and water; and intermediate manufactured goods.
The annual change in the PPI for intermediate manufactured goods was 7.7% in March, up from 6% in February. The PPI for electricity and water rose 11.4% in March, slowing from 13% in February. The mining PPI was up 8.6% y/y last month, accelerating from 6.6% in February. The annual PPI for agriculture, forestry and fishing was 0.4% in March, slowing from 1.2% in February.
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