PRODUCER inflation slowed sharply to 6.5% in May compared with a year ago from 7% in April, Statistics SA said on Thursday.
The figure of 6.5% was the slowest pace of increase since December 2015.
Easing inflationary pressures support unchanged interest rates.
The producer price index (PPI) for final manufactured goods, which measures changes in the prices of locally produced commodities, was up 0.3% during the month.
The main contributors to the annual rate of 6.5% were food products, beverages and tobacco products (2.9 percentage points); metals, machinery, equipment and computing equipment (one percentage point); and transport equipment (0.9 of a percentage point).
The contributors to the monthly increase of 0.3% were food products, beverages and tobacco products (0.1 of a percentage point); coke, petroleum, rubber and plastic products (0.1 of a percentage point); and transport equipment (0.1 of a percentage point).
Old Mutual Investment Group senior economist Johann Els said that both consumer and producer inflation had surprisingly come out lower than expected in recent months. “Inflation pressures seem to be limited now and we suspect that the inflation peak is in sight. The rand has stabilised and the economy is weak so we do not see the Reserve Bank hiking interest rates anymore this year.”
Annual intermediate manufactured goods producer inflation rose, while that for electricity and water slowed.
The annual percentage change in the PPI for mining was 14.6% in May 2016 compared with 10.3% in April 2016, mainly on gold and other metal ores and stone quarrying, clay and diamonds.
The annual agriculture, forestry and fishing producer inflation increased, mainly reflecting higher agricultural produce following a severe drought.
Picture: THINKSTOCK
PRODUCER inflation slowed sharply to 6.5% in May compared with a year ago from 7% in April, Statistics SA said on Thursday.
The figure of 6.5% was the slowest pace of increase since December 2015.
Easing inflationary pressures support unchanged interest rates.
The producer price index (PPI) for final manufactured goods, which measures changes in the prices of locally produced commodities, was up 0.3% during the month.
The main contributors to the annual rate of 6.5% were food products, beverages and tobacco products (2.9 percentage points); metals, machinery, equipment and computing equipment (one percentage point); and transport equipment (0.9 of a percentage point).
The contributors to the monthly increase of 0.3% were food products, beverages and tobacco products (0.1 of a percentage point); coke, petroleum, rubber and plastic products (0.1 of a percentage point); and transport equipment (0.1 of a percentage point).
Old Mutual Investment Group senior economist Johann Els said that both consumer and producer inflation had surprisingly come out lower than expected in recent months. “Inflation pressures seem to be limited now and we suspect that the inflation peak is in sight. The rand has stabilised and the economy is weak so we do not see the Reserve Bank hiking interest rates anymore this year.”
Annual intermediate manufactured goods producer inflation rose, while that for electricity and water slowed.
The annual percentage change in the PPI for mining was 14.6% in May 2016 compared with 10.3% in April 2016, mainly on gold and other metal ores and stone quarrying, clay and diamonds.
The annual agriculture, forestry and fishing producer inflation increased, mainly reflecting higher agricultural produce following a severe drought.
